Economics director Noble Francis provides an initial response to the Chancellor's Budget announcements
COMMENTING on the Budget, Construction Products association (CPA) economics director Noble Francis said: ‘Jeremy Hunt positioned his Spring Budget today as a plan to remove obstacles to investment, tackle labour shortages, break barriers to work and harness science and technology for growth.
‘There were a few positives for the construction industry and wider supply chain with the Chancellor announcing large ambitions of £20 billion for carbon capture and storage, £960 million for low-tax investment zones, £200 million for regeneration projects, £400 million for levelling-up projects and £200 million for potholes.
‘In light of the recently announced delays to HS2, however, the key to the impact of the Budget will be whether government can actually deliver on its announcements. The delays to HS2 announced just before the Budget will hit both infrastructure and economic activity in the near term and increase the cost of HS2 by billions in the medium term.
‘The CPA welcomes the announcement on full expensing of business investment, which allows 100% of qualifying UK capital expenditure to be written off against taxable profits. This could help spur much-needed investment in capital expenditure and green investments for manufacturers.
‘We also welcome the Government’s announcement that it will launch a call for evidence on the critical issue of ‘nutrient neutrality’, which is currently delaying the delivery of 120,000 new homes. Government has said it will also provide funding to support clearer routes for housing developers to deliver ‘nutrient neutral’ sites. Addressing this critical issue will be crucial for developers and the whole house-building supply chain to ensure that more homes can be built each year.
‘However, the lack of any government help for first-time buyers, which is critically needed after the sharp rise in mortgage rates and the substantial fall in housing demand since the Mini-Budget in the autumn, means that there will be a significant double-digit fall in house building in the next 12–18 months.’