Chancellor George Osborne delivered his Budget statement to the House of Commons on Wednesday, 16 March 2016. Listed is a further selection of comments on the key announcements.
Dr Diana Montgomery, Chief Executive of the Construction Products Association (CPA), commented:
“The Chancellor has rightfully recognised the value of infrastructure investment, both for the present and future generations’ benefit. The government’s support for the National Infrastructure Commission is encouraging and the list of projects given the green light such as HS3, Crossrail 2 and numerous other schemes across the country will please everyone in the construction supply chain. Still, we are very mindful that announcements are one thing but spades in the ground are another thing altogether. We therefore welcome the announcement of a National Infrastructure Delivery Plan which we hope will provide clear, short-term delivery details for major projects and give manufacturers and builders the confidence they need to invest in skills and manufacturing capacity.
“Aside from that promised pipeline of work, there was little else of note for either manufacturers or the construction industry. The £750 million in spending on flood defences belatedly begins to make up for the cuts imposed during the previous government and is welcome news to those who have always been keen to offer sustainable, innovative solutions. In addition, the freeze on fuel duty will certainly be appreciated by our members distributing construction products up and down the UK. Finally, the government’s ongoing commitment to the ‘Northern Powerhouse’ will benefit both the regeneration of the region and the many manufacturers who are also major employers in the area themselves.”
“Given the constraints the government is facing from global headwinds and the cocktail of risks,” Dr Montgomery concluded, “we were always realistic in our expectations about today’s Budget. Our main focus continues to be on ensuring that government works with industry to create clear, consistent policies with long-term roadmaps for delivery. Ultimately, this will be key to encouraging investment, innovation and growth.”
Phil Harris, head of sales at BLP Insurance, comments on whether steps being taken to address the UK housing crisis go far enough:
“Measures announced in today’s budget will go some way towards stimulating housebuilding in the UK but it’s disappointing the lack of new initiatives directly applicable to providing a long term solution to the chronic housing shortage.
“We applaud the steps being taken to streamline the planning process by utilising a more zonal approach to applications. This demonstrates the government’s commitment to address flaws in the current process, speeding up approval and giving developers more certainty early on in the planning stage.
“Releasing more Brownfield sites for development is also a step in the right direction to face up to the shortage of land needed to meet the deficit between housing supply and demand. There is an understanding that local authorities, central government, the Homes & Communities Agency (HCA) and Network Rail all need to take a joined up approach to deliver land where it matters.
“The government’s commitment to additional spending on infrastructure across the UK will give steam to the Northern Powerhouse agenda, encouraging the devolvement of investment capital away from London and the South East. Improving the connections between towns and cities across the UK, through the HS3, the trans Pennine Road link and further road upgrades, shows that the government recognises the importance of attracting investment towards the North of England. Property developers should be hot on the heels of these developments.
“Stones remain unturned and significant challenges still exist for the UK housing industry, including the current skills gap and a shortage of traditional building materials. In the absence of long-term solutions to all of these headwinds to the housing shortage, they will continue to have an adverse impact on the speed at which new homes can be built.”
Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“It is good to see the Government stepping up its efforts to support aspiring buyers’ ability to access the housing market. The creation of a lifetime ISA will give the under 40s a significant boost when it comes to raising a deposit, with savers able to receive a maximum £1,000 bonus each year until they are 50. Raising the threshold for the higher rate of income tax should also provide middle-earners with more spare cash to put towards a deposit or meeting their mortgage repayments.
“While these measures will support aspiring homeowners, this Budget doesn’t do enough to address supply-side issues that are putting pressure on affordability. It may be a Budget for the ‘next generation’ – but the next generation need somewhere to live. The plans to support housebuilding in local authorities via the Local Growth Fund are welcome, and efforts to streamline the planning process and promote building on brownfield sites are also encouraging. However, the scale of the imbalance between supply and demand warrants a comprehensive, long-term housebuilding programme that this Budget doesn’t deliver. The Government hasn’t promised any policies that will give housebuilding activity the kick-start that it needs to meet necessary targets.”
Brian Rogan, head of Rating at CBRE Scotland, commented:
“The Chancellor’s rating announcement in today’s Budget does not extend to Scotland however CBRE strongly urges the Scottish Government to follow the Chancellor’s budget statement. In Scotland we need a clear commitment to more frequent (e.g. three yearly) rating revaluations, an increase in the threshold for the ‘large’ property supplement and a change to the basis of the annual rate increase from RPI (Retail Price Index) to CPI (Consumer Price Index).
“High rate liabilities are dragging on Scottish business performance and profitability and if Scotland is to remain a competitive business location the Scottish Government, irrespective of the forthcoming election result, must match, or indeed better, the Chancellor’s proposals to rein in rate liabilities.”
Naomi Heaton, CEO of London Central Portfolio, reflected:
“Overall, the Budget was not bad news for individual property investors. There were none of the shocks that we have been accustomed to in previous Budget speeches. Investors have already absorbed the inevitability of ARSD and it will only be a matter of time before it is assimilated it into the buying equation, particularly in London. The pain will be felt far more in the regions where the 3% rise represents a significantly greater increase on the existing SDLT rates.”
“For corporate investors, the application of the 3% ARSD was unexpected although there will be some sympathy that the playing field was levelled. In any event, many corporates will be unaffected if they are investing in entire buildings. However, there is a concern that the Chancellor is doing nothing to help develop our essential PRS sector which needs a minimum of 128,000 new units by 2021.”
“The best news appears to be for shareholders in Property Funds and investment companies who should benefit from the new reduced CGT rates. This aligns with the Government’s intention to encourage investors to go into the UK’s PRS through a professional entity, rather than in a private capacity.”
Rob Oliver, Chief Executive, CEA (Construction Equipment Association) said:
“The Budget Statement told us a number of things we already knew – not least that the export led growth predicted by the Chancellor a parliament ago has proved to be illusory. Many of the other major, and emerging, economies are not performing well and as a result are not buying our UK manufactured construction machines in the numbers we need. It was, however, good to see him give a nod to the value of the new National Infrastructure Commission and their championing of Northern transport links, plus Crossrail 2. HS3, the upgraded Manchester to Leeds rail link, has been given the “green light” but let’s hope it doesn’t encounter too many red lights on its way to delivery, as other major projects have.
“There was some focus on productivity which is to be welcomed, despite the Office of Budget Responsibility’s downgrade of their productivity growth forecasts. As a country, we continue to lag behind key competitors, which is one of the reasons why as the CEA we are focusing on productivity with our Construction Productivity Forum initiative this year.
“Promised changes to the Climate Change Levy could be helpful for business, but we would need to see more detail on this. Helpful too that there appear to have been no more stealth taxes introduced in the same way that the Apprenticeship Levy was slapped on business costs.”
Keith Griffiths, Organiser of the UK Northern Powerhouse International Conference & Exhibition, said:
“This is excellent news for our region, and we are delighted that the Government is serious about listening to the north’s businesses and creating a powerhouse that can deliver more growth, jobs and prosperity in the north of England.
“Improved road and rail links to better connect the north were a clear priority for the business leaders attending the UK Northern Powerhouse Conference.
“Now we have the green light, it’s time for action and to deliver these new projects quickly. The Chancellor said that today’s budget was about delivering for the next generation, but we are running out of time. We urge the Chancellor to do everything in his power to make sure these projects are delivered without delay.
“For too long London has seen the lion’s share of transport investment whilst vital infrastructure in the north has been left to fall behind, despite serving around 15 million people – around six million more families and young people than the Capital.
“Organised by business, for business, the inaugural UK Northern Powerhouse International Conference & Exhibition gave a voice to the biggest commercial conversation in the North for a generation.”
Responding to today’s Budget, CIH chief executive Terrie Alafat said:
“CIH has been calling for more measures to address homelessness and rough sleeping and today’s announcement of an investment of £115 million to tackle rough sleeping is good news.
She continued: “It will go some way to supporting vulnerable people who need a home and we hope it marks the start of more action to come to end homelessness in this country. Homelessness is increasing and we would like to see additional investment in services to prevent homelessness and in more affordable housing.”