Aside from stamp duty reform, the story for construction in the Autumn Statement was a continuation of the narrative under the coalition, rather than a radical overhaul
The final minutes of George Osborne’s Autumn Statement this week were by far the most crucial for construction. The chancellor’s announcement of stamp duty reform was not only a relief after a highly political speech that had contained little else of promise for the industry, but also after months of concern among housebuilders that the government needed to intervene to address a slowing market.
The stamp duty reforms, a move to create a system of tax bands which Osborne claimed would see 98% of buyers pay less duty, should act as a significant spur to the housing market, improving affordability of homes for the majority of buyers. The move, welcomed by volume housebuilders, was a measure recommended by Building as part of our Agenda 15 campaign to promote a more stable and efficient policy environment for construction.
Away from the stamp duty announcement, though, the story for construction was very much a continuation of the narrative which has existed under the coalition, rather than a radical overhaul. Despite Osborne’s recent rhetoric around a “rebalancing of the economy” and a “northern powerhouse”, the reality was that investment announced in the statement followed a similar pattern to that across the past five years.
On the one hand, Osborne talks of the need for “rebalancing”, but on the other, he repeatedly insists that the economy needs to follow on its “current course” - with a constrained spending environment underpinning that
Yes, there were some sizeable wins for the North - notably investment in a research institute at Manchester University and a £78m new theatre in the city - but there were also major projects for the South. The statement was more a collection of discrete wins than a radical shift in approach to the regions.
Similarly, while the National Infrastructure Plan accompanying the statement gave spending clarity on roads and flood defences, in particular, there was no radical increase in long-term visibility.
This sense of familiarity exposes a tension at the heart of government - and Conservative - policy towards the industry. On the one hand, Osborne talks of the need for “rebalancing”, but on the other, he repeatedly insists that the economy needs to follow on its “current course” - with a constrained spending environment underpinning that. Given that spending is already bumping along at a relatively minimal level in both the North and South, it is difficult to see how - when it comes to infrastructure at least - the government will be able to effect a large-scale change without changing the landscape for private investment, which will take much longer to instigate.
Another tension exists when it comes to training: the government is not short of pronouncements on the importance of training and apprenticeships, and indeed these were mentioned within the opening sentences of the speech. But the moves to support growth in these areas, so far, have again been discrete initiatives rather than offering a sea change. The abolition of employers’ National Insurance contributions for apprentices under 25 years old will be welcomed by small businesses in particular, but industry federations have been quick to say that long-awaited clarity on reform of funding for apprenticeships would have been much more significant.
The willingness of any government to take a long-term stance on issues like these is, of course, hampered by the political cycle. But this is exactly why the run up to the next election is the time for the industry to lobby for parties to introduce a framework for cross party collaboration on issues that can only be resolved by an approach that transcends the political cycle - with infrastructure and training the most critical among them.
Sarah Richardson, Building editor