Spring Statement disappointing for industry
Trade organizations say Chancellor’s statement was a disappointment and failed to deliver
RESPONDING to the Chancellor of the Exchequer’s Spring Statement, the CPA (Construction Products Association) said anyone seeking major announcements relevant to UK construction or products manufacturing was likely to be disappointed, as the focus instead was largely on energy security, resilience, and relief for the cost-of-living increases and aimed very much at individual households.
Peter Caplehorn (pictured), chief executive of the CPA, said: ‘Reducing VAT on energy-efficiency products from 5% to 0% is of course welcome, but it won’t make a significant difference at a time when energy efficiency is critical for both the cost-of-living crisis and to move towards net zero. The decision to review the apprenticeship levy is long overdue, but perhaps more relevant is the 5p per litre cut in fuel duty, as our sector is one of the largest users of the road network.
‘We will echo many others across manufacturing, however, to say that the lack of support to tackle spiralling energy costs for businesses is frustrating. Energy bills often account for as much as one-third of overall costs for manufacturers, and with these bills, at historic highs, it was a critical moment in need to ensure a resilient UK industry.’
Suneeta Johal, chief executive officer of the CEA (Construction Equipment Association) said: ‘This mini-budget was an opportunity for Rishi Sunak to take significant action to help businesses to minimize the impact of rising inflation, which is at a 30-year high and continues to rise. This Spring Fiscal Statement comes at a critical time for manufacturing in the UK – and as expected it did not deliver and was very much an exercise of smoke and mirrors.
‘Petrol and diesel prices have soared in recent weeks hitting an all-time high, and whilst today’s announcement of a fuel-duty freeze and the temporary cut of 5p per litre is welcome, in reality it will do very little in the way of easing the burden on the construction sector where, despite extensive lobbying, the Government has ignored pleas for a delay of the reform of the red diesel and biofuels rebate.
‘Spiralling energy costs are crippling the sector and the situation has worsened due to the Russian war on Ukraine. The lack of support for businesses is deeply disappointing. The VAT cut on energy-saving devices, such as solar panels, has marginal benefits, but investment in alternative sources of power was overlooked and is an opportunity missed. So, we wait in anticipation to see what the energy supply strategy will bring next week.
‘The Chancellor also announced changes to research and development tax credits, saying ‘the generosity of reliefs for business investment would be increased to boost UK productivity’, but this will not be addressed until the Autumn budget alongside cutting tax rates on business investment. It was immediate help our sector needed and once again the Government failed to deliver.’