InsightsInsight - Construction - POSTED: July 17 2015
A budget for construction?
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The July budget announced that the new Help to Buy: ISA (originally announced in March) will be introduced from 1 December 2015 and will support those saving to buy their first home with a maximum government bonus of £3000 for those who save £12,000.
The Budget also introduced “Pay to Stay” whereby social housing tenants with household incomes over £40,000 in London (and over £30,000 in the rest of the country) will be required to pay a market or near market. Housing Associations will be able to use the recovered subsidy (which it is hoped will amount to hundreds of millions of pounds in additional rental income) to reinvest in new housing.
Roads and Railways
By 2020-21, the Government will have invested over £28 billion in enhancements and maintenance of national and local roads. Future roads investment will be funded by a reform to vehicle excise duty (VED) to create a new roads fund. A second Road Investment Strategy will be published by the end of this Parliament, building on the first strategy, which was published in December 2014.
To balance the economic strength of London other parts of the country need to be built up, partly through the “Northern Powerhouse” to be done in part by:
- Strengthening the Northern powerhouse through further devolution to cities such as Manchester, Sheffield, Liverpool and Leeds;
- Putting transport for the North on a statutory footing and investing £30m to enable it to connect northern England together, with seamless Oyster style ticketing across the region; and
- A new round of Enterprise Zones for smaller towns
Investment is to be made in infrastructure in the South East and the South Coast, with its strengths including tourism and enterprise. Domestic rail services are being upgraded to bring Ramsgate within an hour of London. The Department of Transport has asked the rail industry to include extending High Speed 1 services to Hastings and Rye in the forthcoming Kent Route Study. The Government will extend the scope of the Lewes-Uckfield study to look at improving rail links between London and the south coast.
The Budget announced a commitment to significantly increase the quantity of apprenticeships to three million by introducing a levy on large UK employers. Businesses will also be consulted about the interaction with existing levy boards. The Government will consider whether employers and insurers should play a greater role in providing support for those who suffer industrial injuries in the workplace. Further details of both will be set out in the forthcoming spending review.
The Budget announced a compulsory national living wage to come into force in April 2016 starting at £7.20 and rising to over £9 by 2020, together with a tax free national minimum wage.
The Green Investment Bank was announced in 2010. The government is exploring options to move the Green Investment Bank into private ownership to ensure its future sustainability.
Whilst the Northern Powerhouse announcements will be of national interest and the infrastructure investment in Kent and Sussex welcomed, it is vital they receive serious financial backing rather than remain vague policy statements. There is however little new for the construction industry who will see the budget as a disappointment. Solving the housing crises and wide scale improvements in infrastructure are essential for the UK economy but they continue to take a back seat to more populist measures.
This content is correct at time of publication
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