Budget Day, when all good news is leaked already or old stats re-announced, and bad news is buried in footnote on page 237
What are we expecting from today’s Budget?
Well, if the Emergency Budget just after the election and the Comprehensive Spending Review were anything to go by, not very much in the way of handouts.
But then there’s the argument that the Coalition government hacked away so much then – when they had the chance to do it – that there’s a) nothing left to cut anything from and b) that if they really, truly want this to be a Budget for growth, then measures to help growth have to be brought in.
The industry still wants to see a reduced rate of VAT – of 5% instead of the eye-watering 20% – on repair, maintenance and improvement work. This will help bona-fide builders to avoid being shunned in favour of their ‘off-the-books-and-no-VAT’ competitors. It will also – as similar experiments on the Continent have shown – actually bring in more revenue to the tax coffers, since it will be an incentive for people to spend. Rumour has it that Shadow Chancellor Ed Balls is starting to be keen on the idea.
However, as Gordon Banks MP pointed out at an NBG Editors’ Event yesterday, there are so many industries claiming that for their own particular area (including the whisky and beer producers) that it is danger of becoming a diluted argument.
Another thing the industry really, really wants (needs?) to see, is some action on fuel.
The fuel duty escalator is, it seems to me, designed to screw each and every person who relies upon some form of motorised transport. (That means all of us). I live near the Freight Transport Association head office and they have a great poster showing a lorry broken up into the parts that relate to the price of fuel, the VAT and general fuel duty. Quite scary.
Rumours were bouncing around yesterday that there might be another freeze on this ridiculous, but obviously terribly lucrative, tax. Let’s hope so.
We’ve also heard today that there will be an announcement of a replacement for Labour’s HomeBuy Direct – FirstBuy. Aimed at getting first-time buyers I on the housing ladder via new-build properties, it’s an admission that the government can’t really see any light at the end of the mortgage-lending tunnel just yet.
All well and good to get first time buyers into the market, but surely just getting them into new build properties is only a half-measure? It’s property transactions that fuel RMI spend and we need more transactions of older, existing properties if merchants are really going to see the improvements in RMI business that they need.
Still, if, it’s true that developers will no longer need planning permission to convert commercial property into private dwellings, then there could be some boost for merchant businesses there. It could also help to ease the housing shortage – as long as they are in places where people actually want to live and work.
Watch this space. We’ll be listening avidly and tweeting stuff we think is useful. Follow buildersmerchantsjournal.net at www.twitter.com/BMJNet.