Budget

GUEST ARTICLE: Spring Budget – industry reaction

  • 7 Mar 2024

The following article features industry reaction to yesterday’s Spring Budget from Chancellor of the Exchequer, Jeremy Hunt…

Richard Besant, Director at Powdertech

“The Budget was a curate’s egg. There were a few giveaways which were welcome, particularly around National Insurance, but more needs to be done to support UK businesses that are being hammered by inflation.

“A lot of what was on offer felt like too little, too late, geared towards the public voter than kick-starting UK plc.

“Any budget offer now probably won’t be actionable before the election thus rendering it ineffective, creating further uncertainty. This is why any commitments, as positive as they are, on things like big infrastructure and regional levelling up, need to be taken with a big pinch of salt.

“With a spending review likely, whoever gets in, there remains a degree of uncertainty which is affecting investor confidence, and as a result impacting future commercial and residential development. It’s resulting in stagnation throughout the construction supply chain, which won’t likely resolve until a new Government is in power and the economy stabilises.

“Another persistent pain point is energy costs, and it was unfortunate, yet unsurprising, that the industrial energy cap was not reduced. Perhaps this was a matter of convenience for a beleaguered Government, keeping the UK business community paying inflated prices on long tariffs to support the domestic price cap.”

Budget

Ben Hancock, MD at 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.”

Allan Wilen, Economics Director at Glenigan

“As expected, the Chancellor has prioritised headline tax cuts for the public, intended to bolster the Government’s election chances.

“Given the lack of fiscal headroom, the lack of additional public sector funding for construction-related areas will be a disappointing but unsurprising turn of events for many in the industry. Overall departmental capital programmes for the next financial year are unchanged on previous plans.

“Whilst the Chancellor announced targeted funding for 15 new special free schools and for new children’s homes, the Government has been cautious about making any big infrastructure commitments during the run-up to the next general election, affecting the delivery of existing and planned major capital projects.

“This lack of clarity may have a knock-on effect across the construction sector, with private investors likely to keep their powder dry as they wait out the uncertainty.”

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