On the key issues of net zero and levelling up, the chancellor’s spring statement was somewhat of a missed opportunity, says ACE’s Stephen Marcos Jones as he reflects on what Rishi Sunak's statement means for construction.
The backdrop to today’s spring statement from the chancellor was, of course, inflation. Already at higher levels than many can remember, owing to the effects of the pandemic and our new trading arrangements following Brexit, the crisis in Ukraine has added yet more economic pressure by pushing up fuel and energy costs.
The official forecasts from the Office of Budget for Responsibility suggest inflation will peak at around 9% this year. While our members might not be as directly impacted as other businesses working in different sectors, they will still be feeling its effects – whether on the price they are paying for goods and services, higher energy costs, or the impact on recruitment and retention.
A swift and peaceful resolution to the war in Ukraine would help release some of this economic tension at home, but the fact remains that we are now entering a third year of financial uncertainty following the pandemic and businesses will need all the support they can get to ensure they are in the best possible position to help drive economic growth and recovery.
In his statement, the chancellor focused support on individuals through a range of measures aimed at helping families through the energy crisis. Politically this makes a lot of sense, but businesses are affected by the current crisis too. We would have hoped for more proactive, immediate and targeted moves to mitigate the inflationary pressures for UK plc.
I was pleased to hear announcements to broaden the scope and scale of R&D tax credits, as well as the promise of a review of the tax system and apprenticeship levy to encourage investment in adult training. These are both vulnerable areas which can be easily affected by companies tightening their belts in response to a difficult economic situation.
Whilst the move to cut VAT to zero percent on energy efficiency investments for homes is positive, we would like to have seen more to support the pathway to net zero.
For net zero and levelling up, the statement was perhaps a missed opportunity. Not only in terms of making progress towards our national ambitions, but also in using them as catalysts for economic growth and recovery.
Stephen Marcos Jones is CEO of the Association for Consultancy and Engineering and Environmental Industries Commission.