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[March 2005]
Pre-Election Budget Provides Mixed Fortunes
The Construction Products Association gave a reserved welcome to the British Chancellor's carefully crafted Budget in advance of an expected General Election. Commenting on the Budget Statement, the Association's Chief Executive, Michael Ankers, said: "The Chancellor has listened to business, and avoided imposing any of what he called his 'modest fiscal tightening' on industry. This was a budget with some positives but also a number of disappointments.
"Gordon Brown reiterated several times in his speech the Government's commitment to continue with the increased level of investment in the built environment and extended this to the rebuilding or refurbishing of 8,900 primary schools between now and 2010 - something we welcome. In contrast, measures to increase much needed investment in the transport infrastructure have been put off again. It really is time for action rather than words.
"Some 12 months since Kate Barker presented her Review of Housing Supply to the Chancellor it is disappointing that he said nothing that will help take her recommendations forward. However, the increase in the stamp duty threshold will undoubtedly help first time buyers get on the property ladder, although the real need is to ensure the speedy release of more land for housebuilding.
"The Association appreciated the release of clearer guidance on the R&D tax credit, as the current arrangements are too bureaucratic to encourage many firms in our industry to take advantage of this incentive. At a time of high and rising oil prices we welcome the Chancellor's decision to once again defer any increase in fuel duty.
"Although we were pleased that he has extended the list of energy saving products eligible for a reduced rate of VAT, our biggest disappointment was the failure to lower the rate of VAT on the installation of high efficiency condensing boilers. There is real concern that without this tax incentive, the regulatory changes that come in on 1 April will not deliver the reductions in carbon emissions that the Government is seeking, and will seriously disrupt the boiler industry in the UK.
"The Association's other disappointments with the Budget were on the environmental side. The arguments for retaining the Aggregates Tax completely misunderstand the adverse impact this measure is having on the environment, whilst the Government missed the opportunity to clarify the relationship between the Climate Change Levy and the new EU Emissions Trading Scheme."
ENDS