Chancellor Responds to Several FMB Requests in Budget

The Chancellor used this week’s Budget to set out the Coalition Government’s plan for growth. This was a missed opportunity to help small and medium sized construction companies in many ways, but the Chancellor did listen to the FMB on a number of issues.

Tackle the housing crisis
The Government will provide £250 million to support first time buyers to purchase a new-build property. The FirstBuy programme will assist over 10,000 households with equity investments jointly funded with house-builders. Although the announcement is welcome, the FMB is concerned this is not a sustainable solution for people trying get onto the property ladder, or for the tens of thousands of small house builders struggling in the current climate. We will look to work with the Government to ensure the money is spent in the most effective way. In addition, the Government hopes to strengthen demand for residential property by reforming the stamp duty land tax rules applied to bulk purchases. The aim is to reduce barriers to investment in residential property, promoting private rented housing supply

Introduce a presumption in favour of sustainable development
The Government has committed to introducing of a new presumption in favour of sustainable development so that the default answer to development is ‘yes’. The FMB hopes to see a robust definition of sustainable development in the forthcoming National Planning Policy Framework.

Combat the rising cost of fuel
In response to the current oil prices the Government has cut fuel duty will be cut by 1 penny per litre. The Government will also abolish the fuel duty escalator and replace it with a fair fuel stabiliser, which means when oil prices are high fuel duty will increase by in?ation only. The 2011-12 in?ation-only increase in fuel duty will be deferred to 1 January 2012. The 2012-13 increase in fuel duty will be implemented on 1 August 2012.

Invest in skills and training
The Government is spending around £1.5 billion on the apprenticeship programme with the aim of increasing the number of employers offering apprenticeships. In order to help SMEs, the Government will invest £75 million to support business consortia to set up and maintain advanced and higher apprenticeship schemes, supported by grants.

Introduce a package of incentives for the Green Deal programme
The Chancellor hinted at the possibility of future announcements on the Green Deal, saying that the Government will act to encourage and incentivise take-up of the Green Deal so that it will appeal to households, businesses and prospective providers alike, before it is introduced in 2012. However, the FMB is disappointed the Chancellor missed this opportunity to make a firm commitment to incentives such as a cut in VAT for energy efficiency improvements or changes to council tax, business rates and stamp duty.

Delay the cut to the Small Business Rate Relief
The small business rate relief holiday will be extended by one year from 1 October 2011.
For small businesses struggling with the VAT rise and other inflation pressures, the extension to Small Business Rate Relief for properties with a rateable value below £18,000 will help.