The new chancellor’s Autumn Statement has received a cautious welcome by industry bodies with the early consensus summed up as ‘a step in the right direction’ but more is needed.
Construction Products Association Economics Director Noble Francis said: “With one eye on the General Election next year, this was always likely to be an Autumn Statement primarily aimed at helping working households and businesses. Jeremy Hunt highlighted that lower personal and business taxation will play a central role in the Conservative party’s approach for next year’s election and gave more clarity to the Government’s updated approach to boosting growth. A cut in the National Insurance rate from 12% to 10% and ‘Full Expensing’ for business investment were the two key headlines from the Chancellor’s speech in the House of Commons today.
“For UK construction product manufacturers, it is the ‘Full Expensing’ announcement that will resonate most with them. CPA was a key part of the letter calling for this measure to be made permanent and is pleased to see this confirmed today. This will allow companies to invest in the UK to reduce their tax by up to 25p for every £1 they spend on plant and machinery. Other announcements today that will also be of interest to our industry include:
- More funding for apprenticeships and skills.
- Planning reforms to allow councils to recover the full costs of planning applications – provided they meet prompt deadlines.
- A consultation on allowing any house to be converted into two flats – provided the exterior is respected.
- Speeding up and providing more certainty for developers and investors on infrastructure delivery.
- Support for strategic manufacturing sectors, manufacturing SMEs and green industries.
- New Investment Zones announced in the Midlands, Manchester, and Wales.
“While these announcements are helpful, the Chancellor could have gone further with industrial policy by providing a clearer strategy on key growth areas. Equally, more could be done on housing supply and home buying, as well as energy efficiency in housing such as introducing a green stamp duty. While the announcements on improving infrastructure delivery are welcome, how effectively they will translate into reality on the ground is yet to be seen. The Government published a policy paper ‘Getting Great Britain building again: Speeding up infrastructure delivery’, which demonstrates that it finally understands the difficulties associated with delivering major infrastructure projects. It is disappointing, however, that Government hasn’t published an updated National Infrastructure and Government Construction Pipeline since September 2021 and announced in the Autumn Statement that there also won’t be a revised National Infrastructure Strategy until next year. This lack of certainty over the project pipeline means that it is difficult for all firms in the construction supply chain to justify signing-off significant new investments in skills and capacity, especially after all the Government announcements of infrastructure projects being paused, delayed and cancelled this year.
“This Autumn Statement marks a step in the right direction from Government for the construction industry, but how much of it is electioneering as opposed to real action is not yet clear.”
Brian Berry, Chief Executive of the FMB said: “The Autumn Statement will be welcomed by small builders, with the Government finally taking steps to support micro and SME businesses in a sector which has faced significant difficulty in recent years. However, this must only be the start if the Government is serious about tackling the challenges we continue to face. Measures to reform the way local authorities process planning applications is good news, as are plans to help fund local authorities tackle nutrient neutrality mitigation. However, substantial increases in funding for local authority planning departments are needed if we are to see real progress.
“There were some surprising outcomes, like the changes to permitted development rights, which will bring work for house builders and the repair, maintenance, and improvement sector. Buried in the details is additional support for housing associations to deliver energy efficiency improvements. This support should also be rolled out to the owner occupier sector to help improve the UK’s leaky housing stock.
“Financial support for SMEs represents another positive step, along with other announcements to boost SME growth, such as adopting digital technology. It is good to see that skills training has received a boost, with additional funding announced to increase the number of apprenticeships undertaken.”
