UK Budget 2018: Talking points for Construction
Going into this year’s budget, expectations were mixed. During the Conservative party conference earlier in the month, Theresa May declared that the austerity of the past eight years was over. But would Philip Hammond loosen the purse strings in his Budget announcement with Brexit looming?
The answer? Sort of. While there was extra money available in some areas, this was a relatively cautious budget. And with the chancellor telling us that it would have to be revised (or scrapped!) if we leave the EU without a deal, it’s not clear which measures from this budget will actually come to fruition.
Regardless, these are the top talking points for UK construction companies in this year’s budget.
If you’ve been despairing over the state of the roads in your local area, things could be about to change. £30 billion is being pumped into the UK’s road network, with £420 million of the funds going to local authorities to help fix potholes and damaged roads immediately.
The chancellor hopes that this extra money will improve the efficiency of the road network and help businesses thrive.
For the ninth year in a row, fuel duty stays frozen.
Help to Buy
With the current Help to Buy scheme set to end in 2021, the construction industry were looking for the government to commit to extending the scheme further into the future. While the scheme will continue for another two years after 2021, there will be some changes to it. The equity loan will only be available for first-time buyers, and for houses with a market value up to a defined price cap based on the region.
In the buildup to the budget, the only infrastructure announcement we heard was an extra £250 million for superfast broadband in remote areas. This is great news for construction companies which operate outside towns and cities. The announcement comes as part of wider emphasis on technology within the budget.
The government are also consulting on making it requirement for developers to provide gigabit-capable internet connections to new builds.
Elsewhere, big infrastructure announcements were limited.
Despite being announced in Theresa May’s conference speech, there was no extra detail from Philip Hammond on the plan to scrap the housing borrowing cap for local authorities. Instead, the chancellor announced several smaller housing investments, including £291 million to unlock 18,000 new homes in East London through improvements to the Dockland Light Railway.
The British Business Bank will also implement a scheme providing guarantees to support up to £1 billion in lending to smaller housebuilders.
Also, extra money is being pumped into the Housing Infrastructure Fund. A further £500 million will reach the fund, which aims to help supply 650,000 homes.
The Brexit factor
As we mentioned at the start of this article, this budget makes the assumption that the UK will leave the EU with a deal - and presumably the deal will include some kind of transition period to avoid a Brexit ‘cliff-edge’.
If we don’t secure a deal, expect an emergency budget where most of these announcements will be cancelled or postponed. You read the full budget over on Gov.uk. For the latest updates and developments you can see our online newsfeed here.