Products manufacturers say next week’s autumn statement needs to stimulate the economy
The Construction Products Association has called for chancellor George Osborne to switch government spend from services to capital spending in a bid to kick start economic growth.
The CPA called for the chancellor to use next Tuesday’s autumn statement to launch a three-pronged programme to stimulate the economy.
Osborne is widely expected to announce a £50bn programme of housing and infrastructure construction, mostly funded by the private sector. However, it is unclear how the government intends to attract the necessary private investment.
The CPA said the government needs to re-allocate funding from revenue to capital projects, allowing more to be built without increasing overall public spending. It called for the government to help the launch of the Green Deal by cutting VAT to 5% on energy saving work.
In addition it said the government should look to raise private finance through the use of Tax Increment Financing - borrowing off the back of potential future tax revenues - or government backed bonds.
Michael Ankers, chief executive of the Construction Products Association, said the economy was at a critical turning point. “Government has indentified construction as being one of the key industries that can boost economic growth and help drive the UK economic recovery. Yet, at present, our forecasts show that the industry will experience no growth until 2014,” he said.
“Our proposals for the Autumn Statement are sensible measures that will greatly improve the prospects both for our industry and the economy as a whole, without undermining the government’s plan for reducing the fiscal deficit.”