Wednesday's Budget, which had already been well trailed in the press, brought few surprises but some small positives for our industry. Although nothing in the announcements looked like creating a major short term boost to economic growth, welcome measures included further reductions in Corporation Tax, proposals to unblock the planning system, and a reduction in fuel duty which will be particularly welcome after this years increase in VAT. Increased funding for apprenticeships and the additional R&D tax credit will also reward forward-thinking businesses.
The construction industry and timber trade were again disappointed with the failure to incentivise increased investment in the energy efficiency of the existing building stock. There appeared to be little to suggest that government is looking meet the 2050 carbon reduction commitments, let alone to live up to the Chancellor's much repeated claim that it wanted to be the 'greenest government ever'. Although the introduction of financial help for first time buyers is a much needed boost, industry saw little in the way of measures that would make a dent in the 100,000 annual shortfall in new homes.
Commenting on the Budget, Michael Ankers, Chief Executive of the Construction Products Association, said: 'We welcome a number of measures that have been brought in to encourage growth in the economy. These include a serious attempt to unblock the planning system, encouragement for sustainable development, opening up economic activity with the introduction of Enterprise Zones and helping first time buyers access the housing market."
Here are some of the key points:
Small Businesses
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Small companies' research and development tax credits will rise to 200% from April 2011 and to 225% from April 2012, subject to state approval.
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The small business relief rate holiday will be extended by one year from October 2011
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A moratorium exempting micro-businesses and start-ups from new domestic regulation for three years will be introduced from April 2011
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Up to 50,000 additional apprenticeship places to be available over the next four years with the government to provide grants to support business consortia to set up and maintain advanced and higher apprenticeship schemes
Planning and Housing
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The government will consult on proposals to make it easier to secure planning to convert commercial premises to residential use. It will work with local authorities to expedite planning decisions for surplus military land and other public sites suitable for housing.
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All planning bodies to prioritise growth with a new presumption in favour of sustainable development to be introduced so that the default answer to development is 'yes'.
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System for planning applications to be streamlined with a 12 month deadline for the processing of all planning applications, including time taken to appeal, will be enforced
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Fast track planning for major infrastructure applications also to be enforced
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Nationally imposed targets with respect to building on previously developed land will be removed
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250 million scheme to support first-time buyers to purchase new build property, to be established. The programme will assist over 10,000 households with deposits, jointly funded with house builders
Environment
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Initial capitalisation of the Green Investment Bank increased to £3 billion with operations brought forward to 2012-13.
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Government to encourage and incentivise take-up of the Green Deal so that it will appeal to households, businesses and prospective providers alike, before it is introduced in 2012
Training
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Funding for 40,000 new apprenticeships for young unemployed.
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New funding to double the number of university technical colleges from 12 to at least 24 by 2014 as part of the University Technical Colleges programme
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Number of places on a new work experience scheme for young people to increase to 100,000 over two years, rather than 20,000 as previously announced.
Taxes and Fuel
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Corporation tax to be reduced by 2% from April, to 26% and will then be reduced by 1% each year for the next three years to 23% in 2014.
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Fuel duty cut by 1p a litre.
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Fuel duty escalator that adds 1p to fuel duty on top of inflation each year to be cancelled for the rest of this parliament.
Enterprise
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Income tax relief on enterprise investment scheme to increase from 20% to 30%.
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21 new enterprise zones will be funded, including zones in Manchester, Birmingham and London.
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Help for manufacturing to include new export credits, a technology and
innovation centre and nine new university centres.
