10 • INDUSTRYNEWS
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The Budget Outcome
After the delivery of his 8th Budget, one thing George Osborne
failed to do this year was to pull one of those ‘little white rabbits
out of the box’ to keep us all amused and provide a headline.
»»FROM AN INDUSTRY PERSPECTIVE,
the fuel duty freeze was welcome, as were
the cuts in corporation tax and the increase
in small business tax relief which will
exempt thousands of firms.
The Northern Powerhouse got top billing;
but significant spending on infrastructure
including railways and roads will boost
construction opportunities. Additional flood
defence spending is also welcome.
A quick summary gives the highlights,
followed by first industry reactions from
industry corporations.
FORECASTS
Growth forecasts revised down for next
three years, meaning the UK will grow faster
than any other major Western economy
• A million jobs to be created by 2020
• Inflation 0.7% forecast for 2016
• Debt to be £9bn lower in 2015-16 in
cash terms
• Deficit as a share of GDP is projected to
fall 1% in 2018-19
ACTION
• Sugar tax on soft drinks- raising £520m
for primary school sport
• Schools in England to become
Academies by 2022
• Spending cuts of £3.5bn by 2020
• Capital Gains Tax to be cut from 28%
to 20%
• 1% rise in insurance premium tax
• Tobacco tax up 2% above inflation
• Fuel duty freeze for the sixth
consecutive year
BUSINESS TAXES
• Corporation tax (currently 20%) to fall
to 17% by 2020
• Anti-tax avoidance/evasion to raise
£12bn by 2020
• £9bn raised by closing corporate
tax loopholes and tax minimisation
schemes
• Small business tax relief up from £6,000
to £15,000 – exempts thousands of
firms
INFRASTRUCTURE
• Green light for new rail lines including
link between Manchester and Leeds
• £230m for road improvements in
north of England including M62
• £700m for flood defences schemes
• 0.5% rise in insurance premium
tax, with the money being spent on
funding flood defences including new
projects in Cumbria and Yorkshire
• Tolls on Severn River crossings to be
halved by 2018
INDUSTRY COMMENTS
Carolyn Fairbairn, director-general,
CBI: “After a year of surprises, this was
a stable Budget for business facing
global stormy waters. The Chancellor
has listened to our concerns about the
mounting burden on firms and chosen to
back business to grow the economy out of
the deficit.”
AA president Edmund King: “We are
delighted that the Chancellor has resisted
the temptation to increase fuel duty,
which will bring relief at the pumps for
millions of motorists.”
James Hookham, Freight Transport
Association, managing director of policy
and communications: “A further freeze
of duties is welcome but the Chancellor
missed a chance to give a boost to the
stuttering economy by reducing the tax
on an essential business input. Reducing
road fuel duty would ease cost pressure on
businesses operating commercial vehicles
and stimulate economic growth.”
Patricia Moore, UK head of
infrastructure for Turner & Townsend:
“Future spending on transport projects
such as HS3, a new tunnel between
Manchester and Sheffield, and upgrades
to the M62 and main A66 and A69 roads,
will all help stimulate and reinvigorate
the economy in the North providing a
much-needed boost to jobs and trade.
This budget is a clear sign that George
Osborne means business for the Northern
Powerhouse.”
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Alex Hirom, Construction and
Engineering Partner at Bond Dickinson
LLP said: “This is a good budget for the
UK construction sector as the Treasury
announces further initiatives to free
up land for housebuilding; an increase
funding for flood defences through an
insurance levy; and a number of major
projects including Crossrail 2 in London
and Northern Powerhouse projects
including HS3.”
Brian Berry, Chief Executive of the
FMB: “The Government has set itself a
target of a million new homes by 2020.
Official statistics show that annual
housing completions in England totalled
just over 140,000 in 2015, a long way short
of the 200,000 homes - we cannot afford to
lose momentum in the battle to beat the
housing crisis.”
Iain McIlwee, chief executive, British
Woodworking Federation: “We are
also sceptical about the Government’s
commitment to deliver 400,000 affordable
housing starts. It sounds positive, but in
reality it is less of a commitment than a
vague hope. We need a steady flow of
affordable housing onto the market and
realistically this needs to be driven by
direct government investment.”
‘we need a steady flow
of affordable housing’
Laura Smith, CBI head of construction
and manufacturing, said: “The
Government’s announcements on opening
up the planning system and fast tracking the
release of public sector land demonstrates
its focus on housing. However, a vibrant and
healthy housing market requires a mix of
tenures. The decision to apply higher Stamp
Duty to larger investors will damage the
UK’s emerging Build to Rent sector and risks
undermining progress on building enough
new homes.”
Source: Buildingtalk