Chancellor Jeremy Hunt has delivered the Spring Budget for 2024, delivering promised tax cuts- and not much else
As predicted, the chancellor confirmed the 5p cut in fuel duty, as well as extending the freeze in fuel duty.
With a general election looming over the session, the Spring Budget for 2024 was a raucous affair on both sides, as the chancellor took several jabs at Labour deputy Angela Rayner’s owning multiple properties and the Liberal Democrats, who are aggresively campaigning in the chancellor’s own constituency.
Aspects of the budget that will be the most relevant to UK construction include:
- Reducing the higher rate of property capital gains tax from 28% to 24%
- A 1% increase in day-to-day public spending above inflation
- Allowing full expensing- which lets businesses to offset investment in items such as new machinery and equipment against tax- to apply to leased assets
- Increasing the VAT registration threshold from £85,000 to £90,000 from the start of April
- Keeping inflation below the Government’s target of 2% in “just a few months’ time”
Several energy sector announcements were also made, such as:
- Allocating £120m for green industries to develop technologies such as carbon capture and storage projects and offshore wind
- Pharmeceutical giant AstraZeneca plans to invest £650m in the UK, with an expanded presence on the Cambridge Biomedical Campus and a new vaccine manufacturing hub in Speke in Liverpool
- £160m to be spent on two nuclear sites- Wylfa on Anglesey or Ynys Môn in North Wales, and the Oldbury site in South Gloucestershire as part of the same agreement, with the second unspecified at this time
Industry responses- “4/10, must try harder”
Robbie Blackhurst, founder of Black Capital Group
“A pretty average budget for the Built Environment sector. The announcement that inflation is to fall below 2% within months is positive news for the Built Environment sector. There has been significant pressure on material costs over the past 12 months driving up tender and out turn costs. Contractors are continually grappling with the challenge of balancing client amidst fluctuating material prices and supply chain uncertainties.
“Devolution is back on the agenda aiming to address regional disparities, promote local governance, and accommodate cultural and political differences. This will be positive for the sector giving Local Authorities the power to invest in projects that would benefit their communities. However, these are the same promises that we have heard before from this government, devolution seems to be all promise with no product.
“The continued promise of more housing is still on the rotational budget agenda, but as always without much detail provided with the exception of some isolated areas. In summary – 4/10 (must try harder).”
Ben Hancock, MD, Oscar Acoustics
“SMEs have been calling for extra support from Government to tackle rising financial pressures, so it’s a welcome reprieve to see The Chancellor continue the fuel duty freeze. However, energy and material costs still remain a major issue. In the last six months alone, we’ve seen past customers go into administration, roughly every two weeks.
“That said – we’ve seen a huge spike in confidence in the past month and I believe today’s budget will go some way to maintaining this momentum. With orders up 30% in early 2023 and 250% in January this year, we’re pointing to a sudden recovery. If the government comes good on its promises, we might have a fruitful summer ahead of us.”
Not enough on housing, MMC or sustainability in the 2024 Budget
Dave Dargan, co-founder and CEO of Starship
“In Jeremy Hunt’s spring budget, there was a pronounced lack of focus on sustainability and how the UK plans to achieve net zero. Notably, I would have liked to have seen a substantial allocation for promoting more modern methods of construction, reflecting the need for more sustainable housing across the country, especially as the housing crisis worsens.
“While support for first-time buyers has been largely welcomed, it’s also important to remember that in order to get on the property ladder, there needs to be houses to purchase. I believe that if the Government was to prioritise modular housing and support the acceleration of its delivery, it would go a long way towards fixing our broken housing system.
“By investing in more green construction methods, the budget underscores the need for a forward-thinking government who will support the construction industry, drive the country forward and promote resilience, but also sustainability.”
