Industry responses to Chancellor’s Spring Statement

Industry bodies respond to Spring Budget announcements by the Chancellor of the Exchequer 

TODAY [6 March] the Chancellor of the Exchequer, Jeremy Hunt MP, delivered the Government’s Spring Statement – the final budget before the General Election – prompting the following initial responses from two key industry organizations.

The Construction Equipment Association (CEA) said that in what was inevitably a challenging budget announcement during an election period, there was some potential positive news for construction equipment manufacturers and users.

CEA director Nick Ground remarked: ‘After continued representations from the industry, the Chancellor undertook to bring forward changes to the full expensing rules to bring leased equipment into the scheme.

‘Whilst in an ideal world ‘leasing’ may also cover equipment bought for rental purposes, the published supporting information is unclear regarding the timing and detailed content of the necessary legislation.

‘It is too early to tell if this is going to be of help to construction equipment purchasers, but it will benefit some of our members who lease equipment for production purposes. The danger is that the promised legislation may remain as a promise as the general election looms.

‘What can be welcomed,’ he said, ‘is the fuel duty freeze after the unwelcome extra costs associated with the banning of rebated red diesel for construction purposes in 2022.’

Mr Ground added that the much-trailed reduction in employees’ national insurance would be a boost for working families’ household budgets and may reduce some of the pressure on employers for wage increases, but employer’s national insurance contributions remained untouched and was still a significant tax on employment.

Jon Prichard, chief executive of the Mineral Products Association (MPA), described the Chancellors pronouncements as ‘a pre-election budget aimed squarely at voters that offered relatively little for industry’. However, he conceded that full expensing of leased assets was sensible and would be of value to some MPA members.

‘We also note the date of the CBAM (Carbon Border Adjustment Mechanism) being confirmed as 1 January 2027. Given the EU’s equivalent CBAM will come in a whole 12 months earlier, we urge the Government to bring this forward so the British cement industry is not disadvantaged in the interim,’ said Mr Prichard.

‘With increases to business rates and the aggregates levy unchanged from plans, there’s not much to either cheer or boo,’ he concluded.