Budget 2021

[edit] Introduction

On 3 March 2021, the Chancellor set out a plan to provide support for jobs and businesses as the country looks beyond the COVID-19 pandemic of 2020-2021.

The Budget coincided with the publication of the government’s new Build Back Better: our plan for growth strategy setting out how infrastructure, skills and innovation will drive the UK economy.

Several aspects of the announcements are associated with infrastructure, construction, housing and other related subjects:

• An increase in corporation tax for companies making an annual profit of £50,000 or more, tapered from 19% up to 25% for companies with annual profits of £250,000 or more from 2023.
• The furlough scheme was extended until September 2021.
• The introduction of a new Recovery Loan Scheme.
• The extension of the self-employment scheme to the end of September, and inclusion of the newly self-employed.
• Extension of the stamp duty holiday to 30 June for homes under £500,000, and until 30 September for homes under £250,000.
• £12 billion initial capitalisation for the National Infrastructure Bank.
• A new mortgage guarantee scheme will enable homebuyers to secure a mortgage up to £600,000 with a 5% deposit.
• Beginning in April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment, which means they can reduce their taxable profits by 130% of the cost. This is worth £25 billion to companies over the two-year period the super-deduction will be in full effect.
• The UK will issue at least £15 billion in green bonds to help finance the transition to net zero and the government will launch the world’s first sovereign green savings bond for retail investors.
• And to help progress the Prime Minister’s green industrial 10 point plan, new port infrastructure will be built to support the next generation of offshore wind projects in Teesside and Humberside. Additionally, English Freeports will be based in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside and will be special economic zones with different rules to make it easier and cheaper to do business.
• There will be an increase in funding for certain types of skills development, with £126 million of new money to enable 40,000 more traineeships. Incentives for firms that take on an apprentice will double with a payment of £3,000 per hire.
• £10m seed funding for a new MMC Taskforce.

In addition, the industrial strategy was shelved in favour an ad hoc approach to supporting economic growth. The the council of business chiefs which oversaw the industrial strategy, was also scrapped.

[edit] Reaction

CLC chair Andy Mitchell CBE said: "We were delighted by the way that the industry came together for the first time to prepare a single, cohesive set of recommendations to Government. At the Budget we saw that the Government has responded strongly to this unified voice."

However, BSRIA issued this statement: "BSRIA is disappointed that protests about the loss of the large part of the Green Home Grant scheme have not been heeded, so reducing the impact this useful policy could have had on the pace of energy efficient renovation of UK homes. Neither has the much-needed stimulus of a reduced VAT rate for energy efficient products and work made it into the budget. This raises a question about the Government’s true commitment to tackle the enormous challenge that is the reduction of CO2 emissions in the nation’s existing housing stock and commercial buildings. The budget lacks convincing encouragement for those who are 'hands-on' in making the change towards net zero carbon target happen in homes and buildings. A real shift towards a low carbon market remains absent and time is fast running out."

Eddie Tuttle, Director for Policy, External Affairs & Research at the Chartered Institute of Building (CIOB) said: “We are pleased to see that the Chancellor has extended the self-employment scheme to the end of September 2021 to offer certainty to businesses in the sector as well as protect the large numbers of newly self-employed construction workers. However, we are concerned that the Government has missed an opportunity to truly support the industry by failing to suspend the implementation of the VAT reverse charge, which will have potentially severe consequences for the cash flow of firms that have been hit hardest by lockdown. Perhaps most disappointing is the complete lack of mention of decarbonisation of the built environment and absence of any reference in the Budget to the struggling Green Homes Grant scheme. The UK’s built environment accounts for approximately 40% of our total carbon emissions, and any attempt to forge a green industrial revolution must address the energy efficiency of buildings as a matter of priority if it is to succeed.”

Association for Consultancy and Engineering (ACE) CEO Hannah Vickers added: "The built environment sector is the engine room of the economy and the freeports and city deals announcements are exactly the sort of holistic, low carbon regeneration programmes we need to simultaneously create jobs, level up opportunities and hit net zero. But the Infrastructure Bank must also play its part. The Treasury’s scoping document setting out how the Bank will operate is encouraging, taking on board the Construction Leadership Council’s Regeneration proposals. The trick for the bank will be to use its powers to enable ambitious integrated regeneration investments across the UK, whilst avoid getting fixated on individual project deals."

ICE’s Director of Policy Chris Richards said: “If the Government wants to make real headway on their levelling up agenda, they will need to take a radical approach to fixing the problems that hold back parts of the country from realising their economic potential. The UK Infrastructure Bank will move us closer to addressing those problems, but only if it is given the mandate to take a trial-and-error approach to ideas from local and regional leaders. As the Government develops the scope of the Bank, prioritising the delivery of outcomes from day one, not prudent financial management, should be the main effort.”

Chief Executive of NFRC James Talman said: “The Chancellor has set out a solid investment-led economic roadmap in his Budget that supports the UK economy as it comes out of lockdown and into recovery. He is right to focus on tax incentives, many of which will help boost construction - particularly the extension to the cut in Stamp Duty, the ‘super deduction’ for companies that invest in plant and machinery, and the enhanced ‘Structures and Buildings Allowance’ at Freeports. However, the Chancellor can and must go further to encourage investment—not only to help the economy grow but to ensure we make our buildings fit for the future. To spur on investment in the upgrading of commercial buildings, he should extend his ‘super deduction’ policy so that it applies not only to plant and machinery but to buildings too. This will help businesses to not only bring down their energy bills but also to support the UK to reach its net-zero target.”

[edit] Related articles on Designing Buildings Wiki

• Budget 2014.
• Budget 2015.
• Budget 2016.
• Budget 2020.
• Budget 2020 and the first National Infrastructure Strategy.
• Building Beautiful Places plan.
• Cash incentives for employers to hire new apprentices doubled.
• Coronavirus.
• Coronavirus job retention scheme.
• Covid 19 and the new normal for infrastructure systems.
• Government funded apprenticeship incentives.
• Government plans to put UK at front of global innovation race.
• Households Declare.
• New deal for infrastructure 2020.
• Office for place.
• Recommendations for implementation of the National Retrofit Strategy.
• Spring Budget 2017.
• Spring Statement 2018.
• Spring statement 2019.
• Winter Support 2020 - 2021 packages for businesses.

[edit] External resources

• Gov.uk, Build Back Better: our plan for growth.