Ahead of the Spring Budget 2023 taking place next month, the Construction Plant-hire Association (CPA) has written to Chancellor Jeremy Hunt to urge the Treasury to work with the construction plant-hire sector to address concerns and focus on the issues that matter to the industry.
The letter to Mr Hunt states: “The CPA continues to have very real concerns over the challenges facing our members which have continued to mount over the course of the last year. The removal of the red diesel rebate in April last year, coincided with the unprecedented rise in fuel prices due in part, to the war in Ukraine. While prices have stabilised to a degree, high levels of inflation and wider economic uncertainty have all contributed to a challenging year for our members.”
The CPA is the largest trade association for the plant-hire sector in the UK, representing over 1,800 companies who are responsible for 85% of the construction plant used in the UK.
The government has recently formed three new departments – the Department for Energy, Security and Net Zero; the Department for Science, Innovation and Technology; and the Department for Business and Trade. CPA Chief Executive Kevin Minton believes that the creation of these new government departments provides a fresh opportunity to focus on the issues that matter to the plant-hire industry.
Mr Minton said: “We welcome the creation of these three new government departments as they provide opportunities to focus on key issues for the plant-hire sector – namely competitiveness, decarbonisation and the ability to invest in new machinery and technology.
“With the economy narrowly avoiding recession according to the latest figures, it is vital the government works with our members and the wider construction industry to create the conditions needed to drive growth and secure our economic future. These new departments must be at the core of this process – action is needed now.”
In the letter to Mr Hunt, Kevin Minton urges the Treasury to consider five key areas ahead of the Spring Budget on 15th March 2023:
- With the replacement of the Super Deduction Allowance (SDA) due to expire at the end of March, we urge the Treasury to introduce a replacement that includes the plant-hire industry. Encouraging and incentivising businesses to invest will be key to avoiding a prolonged recession.
- A rebate for Hydrogenated Vegetable Oil (HVO) should be introduced for the construction sector, to help companies offset the price rises witnessed over the course of the last twelve months, while simultaneously incentivising companies to move away from fossil fuel powered construction plant.
- The Treasury should keep in place the 2022 cut in fuel duty and resist calls to raise it back to its previous level. Historically, fuel prices remain high, with inflation still set to remain high for the large part of 2023.
- Construction is a key driver of economic growth. In a challenging economic environment, where confidence remains fragile and business investment levels low, it is vital the government remains committed both to HS2, but also further planned infrastructure projects such as Hinkley Point C. Failure to do so will undermine confidence in the construction sector and place doubt on future government plans.
- The government should publish its response and act on the findings of the Chris Skidmore Net-Zero review as soon as possible. The review has clear recommendations and actions needed, for the UK to take advantage in building the green economy of the future. With industry already working towards a range of targets set by government, time is running out for further action.
