Mixed reaction to the Budget

The Chancellor’s recent Budget announced numerous measures that will favour the construction industry, including:

• a 15-year refurbishment programme for primary schools and £350 million investment in further education colleges;
• a package of measures to reduce regulatory burdens on businesses;
• a reduction in the administrative burden of the tax system for small businesses;
• new measures, including fiscal incentives, to reduce greenhouse gas emissions;
• two new reduced rates of VAT for the installation of low carbon technologies.

With the general election now imminent, the 2005 budget has been seen as a political tool rather than a business orientated action plan by many in the sector. But, industry figures did back those measures that will benefit construction and the m&e sector.

ECA director David Pollock said: “This was a measured budget which clearly had in mind the forthcoming general election. The anti-red tape and deregulation measures are to be welcomed, as is the increased level of investment in the built environment, but the real test will be delivery and not just a promise of action.”

Rudi Klein, chief executive of the SEC Group, said: “The budget must be seen against the background of the 2004 Spending Review. This announced significant increases in capital expenditure covering the education sector, the strategic road network, the health sector and housing. Total expenditure in these sectors will rise from just over £21 billion in 2002-03 to almost £35 billion in 2007-08. This is good news.”

However, Michael Ankers, the Construction Products Association chief executive, was not so ebullient: “Gordon Brown reiterated several times the Government’s commitment to continue with the increased level of investment in the built environment – something we welcome. In contrast, measures to increase much needed investment in the transport infrastructure have been put off again. It really is time for action rather than words.”