The chancellor, George Osborne, has delivered his final Budget of the current Parliament. It was a Budget that favoured savers and indicated that an additional £30bn savings in government spending will be needed in the next Parliament. It held few surprises for construction sector, though a number of initiatives will be welcomed.
Plans for 20 new housing zones were announced as well as a new ‘Help-to-Buy’ ISA for first-time buyers which will see every £200 they save for a deposit topped up with £50 from the government. The chancellor also confirmed speculation that he could commit to funding High Speed 3, the proposed rail link between Manchester and Leeds.
The key points for employers included:
- The rate of corporation tax will be reduced to 20% from 1 April 2015
- Employers’ National Insurance Contributions (NICs) for under-21s will be abolished from 1 April 2015
- Class 2 NICs for the self-employed will be abolished entirely in the next parliament
- The fuel duty increase scheduled for September 2015 has been cancelled
- The national minimum wage rates will increase from October 2015, including a 20% rise for apprentices
- NICs for young apprentices will be abolished from April 2016.
Dr Diana Montgomery, chief executive of the Construction Products Association, said: “First, as we have continued to highlight the need for government to clarify its plans to support house building, we are pleased with the innovative ‘Help to Buy ISA’ scheme.
“Second, many of our members, including the steel sector, are energy intensive manufacturers. The plans announced today to bring forward from 2016 to 2015 the compensation for the indirect costs of small-scale feed-in-tariffs are a step in the right direction to improving their competitiveness with European neighbours and levelling that playing field.
“Finally, the wider industry, particularly SME’s, will recognise the impact of the government’s plans to abolish Class 2 NICs in the next Parliament. The real improvement in this case is not the nominal contribution amount – £137 per annum – but rather the savings by removing another regulatory burden and overhead.”
The government’s proposed voucher model for apprenticeship funding is an improvement on what was formerly proposed and shows that Ministers have listened to the construction industry, according to the Federation of Master Builders (FMB).
Brian Berry, chief executive of the FMB, said: “It’s been a long and bumpy road since the Richard Review first touted the idea of putting the purchasing power back in the hands of the employer but today the government has finally set out a clear direction of travel in terms of its apprenticeship funding reforms. The new digital apprenticeship voucher model is a vast improvement on what was formerly proposed.”
Robert Walker, real estate director at PwC, said: “The Chancellor’s announcements of new Help to Buy ISAs and housing investment show he wasn’t joking about ‘fixing the roof’ as the sun starts to shine.”
Jon White, UK managing director at Turner & Townsend, said: “This budget was never going to set pulses racing, however, we can take some comfort from plans to invest in regeneration and transport projects in London. But it was not just about the world’s global capital, there was also a £7 billion cash injection for airfields, rail and better roads in the south west and 20 new housing zones across the UK.”