The Construction Products Association is urging Chancellor Alistair Darling to extend the boiler scrappage scheme and prioritise capital investment to show a clear commitment that public sector net investment does not fall below 2.25% of GDP.
The Association has written to the Chancellor in advance of the Budget, to point out that in the two months since it was set up, the scheme has already committed all 125,000 vouchers initially allocated for the full two year life of the scheme.
The CPA Budget wish list also includes the stipulation that the Budget should:
Chief executive Michael Ankers said: “We recognise the urgent need to reduce public borrowing, which is expected to have reached £178 billion in 2009/10. However, the government needs to ensure that spending occurs where it is of most benefit; ensuring that recovery is not harmed and long-term growth encouraged. Capital spending on essential housing, schools, energy and transport infrastructure stimulates economic recovery in the short-term, with crucial benefits for employment, and leaves a beneficial legacy from the investment by increasing productivity in the longer-term.
“The government must provide incentives to help the creation of a low carbon economy, especially with regard to the energy efficiency of the existing housing stock. Government currently allows a lower rate of VAT on the professional installation of certain energy-saving products. However, this list must be updated to take account of new products and solutions such as energy efficient boilers, glazing systems, water/liquid source heat pumps, solar shading, window films (internal and external), photovoltaics, green roofs, and rainwater harvesting.
‘Finally, the government should allocate an additional £50 million to the Boiler Scrappage Scheme. The scheme which was launched in January this year, has already exceeded everyone’s expectations in the first two months. It is estimated that on completion of the scheme 945,000 tonnes of carbon will have been saved at a cost of just £53/tonne – a much better return on public investment than many of the alternative schemes to promote renewables.
“The UK economy faces many challenges as we try to recover from the worst recession since the 1930s. Addressing the significant budget deficit has to be a key priority, but in developing the programme for this, the construction industry must be seen as a vehicle for delivering the recovery and helping to rebalance the economy.”