Ahead of the budget, the expectations of the construction industry were mixed. Housing was predicted to receive a boost, but tough economic conditions and poor productivity meant that the usual budget ‘giveaways’ weren’t expected - at least, not on the same scale as usual.
Hot on the heels of the latest announcements, we take a look at the autumn budget and how the policy measures within it will impact construction. From tax cuts and tax rises to government investment, here’s everything UK construction companies need to know about the budget.
£44 billion will be used to help the housing market over the next five years, with the government aiming to reach 300,000 homes built every year by the mid-2020s, continuing the upwards trend in the number of houses built each year.
These funds will include £1.5 billion for SME builders, in the form of loans for companies which might otherwise struggle to access finance.
On the demand side, removing stamp duty for first-time buyers for properties under £300,000 (or the first £300,000 on properties worth up to £500,000) should help young people struggling to make it onto the housing ladder.
The chancellor also announced a review of how land is being used for housing, which will be published in a report in the spring. Hammond also stated that the government will consider the compulsory purchase of land with planning permission for housing that isn’t being used.
The chancellor announced the National Retraining Scheme, which will be overseen by the TUC and CBI and fund skills development and training courses for numerous areas of the economy to help tackle skills shortages.
There’s also £34 million set aside to teach construction skills, and a further £30 million for digital courses.
Infrastructure and investment
£1.67 billion of funds will be assigned to the Transforming Cities Fund, that councils can access to fund local transport and other infrastructure projects. Money has also been set aside for the redevelopment of the Redcar Steelworks site, with more funds available for the Scottish government, Wales and Northern Ireland.
Fuel duty and diesel
Fuel duty will remain frozen, as expected. The government first froze fuel duty in 2010 and it has remained at the same level every year since.
Following concerns over air pollution, the tax increase on diesel cars will go ahead - but only for new cars that do not meet the new standards set by the government. Existing owners of diesel cars won’t be affected. Notably, vans will be excluded from the charge. The proceeds of this tax increase will be funnelled into a £200m clean air fund.
The cut to stamp duty for first time buyers will hit the headlines and in general construction companies should be hopeful about the measures announced. The new funding for SME housebuilders is welcome, however we are still awaiting details on how the government will reach its housebuilding target. Construction companies should also look out for the results of the land use and planning review next spring, which should provide some clarity in this area.
We’ll keep you up-to-date on the latest news affecting the UK construction industry - keep checking back for more.