What the industry hopes for from the emergency budget
Contractors are calling for government spending cuts not to fall disproportionately on capital spending. James Wates, chairman of the UK Contractors Group, said he supported moves to reduce overall public spending but warns that cuts to capital expenditure will have an impact beyond the UK construction industry. “Britain’s economic competitiveness in a fast-changing global economy depends on continued investment in infrastructure,” he said.
Meanwhile, the Federation of Master Builders is asking the government to target cuts to VAT on construction. Brian Berry, director of external affairs, said: “A reduction in VAT on energy-efficient materials and repairs would boost the retrofitting market and underpin the government’s Green Deal scheme.”
Architects and chartered surveyors are likewise warning against imposing all of the pain on the capital budget. Simon Rubinsohn, chief economist at the RICS, said: “Reducing capital spending beyond the numbers outlined in the previous budget poses risks to the economy.”
Ewan Willars, head of policy at the RIBA added: “The RIBA is calling for government to continue investing in important infrastructure, and to recognise the importance of these projects to the UK’s long-term economic interests.”
The main concern of housebuilders is for clarity over the Homes and Communities Agency’s Kickstart programme, with all 108 projects currently on hold. The chancellor is expected to outline whether cash can be found to fund the missing £610m in HCA cash that has caused the impasse. Likewise the Home Builders Federation is asking for continued cash for the HomeBuy Direct scheme.
In addition they are looking for reassurance that there is no future in the Liberal Democrat manifesto proposal to levy VAT on new homes. Developers also have concerns that the proposal to increase Capital Gains tax will hit development viability.