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Budget gets lukewarm response from construction

The Construction Products Association described today’s Budget as ‘overtly political’, while the Federation of Master Builders is disappointed it didn’t adequately deal with the lack of mortgage finance.

Budget gets lukewarm response from construction

Michael Ankers, CPA chief executive said: ‘Whilst we welcome the support for a Green Investment Bank and investment in renewables, the big disappointment was the lack of any help for households to improve the energy efficiency of their homes.

“We have consistently called for the government to extend both the list of energy saving products that are eligible for a lower rate of VAT and the boiler scrappage scheme. We are therefore very disappointed that both of these suggestions have been ignored by the government, as these really would have given a clear indication of the government’s desire for a more sustainable future.

“We are pleased that the stamp duty rate holiday for first time buyers has been doubled to properties up to £250,000 in value, as this should boost the housing market further. However, it is also important that support continues for existing schemes, such as Home Buy Direct and Kickstart as these are also important in supporting and encouraging the fragile housing market recovery.”

Richard Diment, director general of the FMB said: “Helping first time buyers get on the property ladder is an important step but most people will still struggle to get the funding they need to secure a mortgage despite the Chancellors promise of further lending from state owned banks. The Chancellor could also have taken the opportunity to reform the stamp duty to abolish the slab structure and replace it with a fairer marginal system similar to income tax.

“The Chancellor paid a lot of attention to the needs of small businesses which is encouraging as they have been badly hit by the recession. The cut in business rates from October will be a help, as will the delayed introduction of the fuel duty increases. However, these are only temporary measures and future tax increases such as those planned for National Insurance will have a negative impact on small businesses, jobs, and growth.”

Diment added: “It is disappointing that there the chancellor missed the opportunity to rationalize the VAT treatment of energy efficiency and micro generation measures. The current situation is inconsistent, with £4.5 billion of energy efficiency works attracting the full rate of VAT despite some less efficient measures attracting a reduced rate of 5%.

“A flat rate of 5% on all energy efficiency measures would produce a more coherent and more readily implementable treatment of energy efficient retrofitting, and a reduction in the VAT rate on the £1.3 billion per year labour element of double glazing and boiler only replacements would only cost £195 million. He has clearly missed an easy cheap common sense move.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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