On 23 March 2022, Chancellor Rishi Sunak delivered his Spring Statement in Parliament amid a cost of living crisis and high public debt after the pandemic.
Bottlenecks in supply after the global economy rumbles back to life and rising energy costs have pushed up worldwide inflation.
Housing and household services contributed 1.49 percentage points to the CPIH 12-month inflation rate in March 2022 of 6.2% – the largest contribution from the sector since January 2009.
As a result, solutions to the price squeeze dominated the speech. But outside of the headline-grabbing measures, like a future cut in the basic rate of income tax, what was in the speech that those in the construction sector need to know?
Sustainability
Sustainability in the construction industry is important, not just to try to keep costs down but to do our part where we can to reduce emissions.
After all, the built environment contributes around 40% of the UK’s total carbon, according to the UK Green Building Council. So, it’s good news that the Chancellor announced measures to make it cheaper to retrofit existing buildings and make them greener.
To do this, the Government has cut VAT on green improvement to properties from 5% to 0%. This includes things like insulation, heat pumps and solar panels.
According to the Government, the move will offer homeowners tax savings of up to £1,000 and contribute to an energy saving bill of £300.
Business support
Sunak made many announcements that businesses in the construction sector will be able to benefit from.
For instance, just like a lot of other businesses in the UK, you will benefit from the Government’s 5p per litre cut in fuel duty, which should offset some growing transportation and travel costs.
The Treasury said the cut represents a saving of £100 for the average car driver over the next 12 months, £200 for the average van driver, and £1,500 for the average haulier.
Meanwhile, the employment allowance, which allows eligible employers to reduce their NICs liability, has increased from £4,000 to £5,000 in the 2022/23 tax year.
The Government said that the £1,000 uplift will see 50,000 fewer businesses having to pay any National Insurance contributions.
Meanwhile, with the super-deduction relief set to end in April 2023, Sunak hinted at future tax changes to encourage investment, while the apprenticeship levy will be examined to better support employers as they invest in adult training.
Levelling up fund
Sunak also announced the second round of funding for the levelling up fund, inviting bids from eligible organisations for the £4.8 billion local infrastructure funding to encourage job creation outside of London and the major cities.
The construction industry will likely play a major role in the policy, as improved infrastructure, town centres and affordable housing will be needed.
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