After the unveiling of the Spring Budget yesterday, David Hopkins, Chief Executive of Timber Development UK, commented:
“The budget announcement was largely unambitious and does little to support the net-zero transition in construction.
Full expensing on capital investments is welcome as the industry attempts to shift to new, greener methods of construction, but it still represents a fall on the previous offer under the now-ending super deduction.
This alone may not provide the stability necessary to keep the sector building, especially since funding support for housebuilding and green energy infrastructure seemed distinctly lacking in the chancellor’s statement. Announcements around HS2 last week will also make many investors nervous about the future pipeline of work in the UK, and little was said today to assuage these fears.
Meanwhile, the innovation investment zones announced by the Chancellor, along with localised levelling up initiatives, were interesting but will be small comfort to many small and medium construction businesses struggling in a stagnating economy, with high material and energy costs.
Measures to help more people into the workforce and recent announcements on visas for foreign construction workers are good to see. However, they also serve to highlight the productivity challenges the economy faces. We are also disappointed in the lack of announcements around upskilling, which could support a green growth economy in this budget.
Overall, whilst the UK may have narrowly avoided a recession, this budget will do little to change the construction environment. Finally, we might highlight the £20 billion investment in early-stage carbon capture and storage technologies and ask whether the government has missed an opportunity to invest in an already existing technology in the form of “trees”. Perhaps revisiting failed tree planting targets could be considered next time.”
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