The cuts to public spending announced in the emergency Budget should come as no surprise and are something the construction sector has been bracing itself for
But the chancellor’s announcement contained little to stimulate the promised enterprise-led recovery. The Scottish Building Federation’s latest membership survey has found confidence in the construction sector slipping into reverse, with many firms blaming a lack of bank lending for our industry’s sluggish performance.
Sadly, I can find nothing in the Budget that would help ease the availability of affordable credit to building firms, to businesses that wish to expand or to homebuyers - all of which should be driving future construction demand.
However politically popular it may be, I fear the proposed new bank levy may actually encourage banks to restrict their lending further.
What’s more, for the construction sector, increasing VAT to 20% is a retrograde step which plays into the hands of cash-in-hand cowboys by increasing their competitive advantage over legitimate building firms.
It will be a further setback to sustainable recovery in the construction industry.
Michael Levack, chief executive, Scottish Building Federation