Builders merchants trade association the Builders Merchants’ Federation has described yesterday’s Budget as a “steady as you go” package.
Despite gloomy predictions and reactions from construction at large, the BMF sees reasons to be cheerful about some announcements the Chancellor of the Exchequer made in his fourth Budget.
For example, it says there is good news on transport costs, business taxation, payroll costs, environmental tax, and for buyers of new-build homes.
The BMF It believes most merchants and manufacturers will see practical and much-needed benefits from George Osborne’s policy and fiscal changes, even if a lot of the changes won’t come through in this financial year.
Peter Matthews, federation secretary said: “Transport is often the second biggest operating cost after wages for BMF members. We are very pleased to hear this September’s planned rise in Road Fuel Duty has been cancelled. The BMF welcomes this and it vindicates our efforts to campaign for this on behalf of merchants.
“We are also pleased the Chancellor will freeze Vehicle Excise Duty rates for HGVs this financial year – though VED for cars and vans will go up next month in line with the Retail Prices Index”.
National Insurance Contributions have been reduced by £2,000 off every company’s bill from April 2014, so consequently, many SMEs will pay no NIC at all – making it easier to take on extra staff. And in two years’ time, the main rate of Corporation Tax will drop 1% to 20%. The Small Profits’ Rate will be merged with the Main Rate into a single rate.
For manufacturers, the BMF applauds the decision to exempt energy-intensive industries like ceramics, cement, minerals and glass-making from the Climate Change Levy. From April 2014, firms that make sanitaryware in Staffordshire and Cheshire ought to benefit from this change.
The Chancellor is helping homebuilders by committing £3½ billion of capital spending over the next 3 years to fund shared equity loans under the “Help To Buy” scheme, as follows:
Matthews added: “The Government is making an effort to address the housing shortfall and we welcome that. The simple fact is that, as a country, we are building fewer than half the number of homes needed to meet population, demographic and lifestyle changes”.
The most intriguing announcement, Matthews believes, was the Government’s decision to accept most of the ideas put forward by Lord Heseltine in his “No Stone Unturned” Report. Under these plans, Local Enterprise Partnerships (LEPs) will compete for a share of a single national fund to support growth over a five year period. At current prices, this equates to £49 billion if it begins in 2015-16. The aim is to release national funds to approved LEP bids to boost local infrastructure, employment & skills, housing, business advisory support, and innovation.
The BMF is waiting to see precisely what new arrangements are introduced for future funding of apprenticeships. The worry for merchants is that the boards of LEPs do not represent all sizes and sectors of local businesses.