The Spring Statement - Our simple guide
14th March 2019
Amid the uncertainty of Brexit, the Chancellor of the Exchequer Philip Hammond released the Spring Statement yesterday, a report on the nation’s finances and how the Government proposes it spends its money. The statement aims to minimise difficulties for the Government as it attempts to agree on a deal with the EU; but how will it affect you and your business? To help you out, we’ve pulled together the most relevant points for the construction industry.
Housing was high on the agenda during the Autumn Budget as the Chancellor lifted the borrowing cap and promised £500m for the Housing Infrastructure Fund to help provide 650,000 new homes. There was more good news for contractors in the Spring Statement as Hammond stated the Government will put an extra £717m into this fund whilst also announcing a new £3bn affordable homes guarantee scheme to support the delivery of around 30,000 affordable homes. As a result, there should be plenty of work for the industry to carry out but there is still more to be done if the Government wants to meet its ambitious new build targets of 300,000 a year.
National minimum wage
The Chancellor confirmed that the National Minimum Wage will be reviewed in an attempt to deliver “sustainable pay rises for millions of British workers” and to end low pay in the UK. In 2017 alone, twice as many workers left the construction industry as joined it. In a survey of apprentices who have left the construction sector, over a third cited low pay as a reason for leaving. The National Minimum Wage will rise to £8.21 from April, but a more significant rise would help to ensure more young people aren’t put off joining the industry, which is vital in order to mitigate the rising skills shortage.
New infrastructure funding was also announced in the Spring Statement, with the Government promising to invest £60m in 10 cities across England including Derby, Leicester and Plymouth; this investment is to go towards bus station upgrades, new cycle lanes and road improvements, meaning more work for the construction sector. On top of this, Hammond also announced that the Government will open a consultation on how to replace private finance initiative contracts. This consultation should help to put the onus on the sector to help find new ways of fuelling investment in infrastructure and attracting investment into the UK.
In a bid to halt climate change, Hammond revealed a series of environmental measures in the statement, crucially acknowledging the need to reduce fossil fuels in order to help tackle emissions. As a result, gas boilers will be banned from new homes from 2025 in a bid to tackle emissions. The government haven’t yet specified exactly what will replace the traditional boiler, so it’s something to keep an eye on!
Whilst the above points provide potentially positive news for the sector, the Chancellor did warn that progress in repairing the UK economy is at risk if it cannot agree a "smooth and orderly" Brexit - so don’t get too excited yet! Let us know your thoughts on the Spring Statement in the comments below or by tweeting us @eurocellplc.