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What does the Budget hold for construction?
Despite the last-minute change at the top following Sajid Javid’s resignation, Chancellor Rishi Sunak has confirmed that the Spring Budget will go ahead as usual on Wednesday.
So, with Brexit looming and yet more worrying news coming from the construction industry, what might this hold for the sector?
The rumour is that increased spending may be on the cards, which obviously has the potential to boost the economy across the board. With the public feeling more inclined to spend, this has a positive impact on all sectors, including construction, financial and retail.
With housing remaining a key focus for the Government, it has already announced that is plans to fund 300,000 new homes a year by the mid-2020s.
This is obviously a positive step for the construction industry, regardless of the effect of increased housing stock on house prices – as long as homes are being built, that’s good news for housebuilders and all the other interlinked industries.
The government plans to significantly increase investment in major infrastructure projects and one of its election pledges was to invest £100bn in building new infrastructure, including almost £29bn on roads and £4bn on flood defences.
Sunak is also known to be a fan of HS2, which has provided a little bit of light amidst the gloom of the past few weeks – HS2-related contracts are behind pushing Britain’s builders back into growth for the first time in 10 months.
And in good news for the oft-neglected North, billions are also expected to be spent on upgrading current Northern rail lines too.
In what may prove to be one of the more controversial aspects of his first Budget, Sunak is expected to scrap the decade-long freeze on fuel duty as part of the Government’s bid to meet its climate change targets.
So-called red diesel, which is used in bulldozers, forklift trucks, cranes and generators, is subject to 11.1p a litre duty, as opposed to the 57.7p for standard diesel – which will clearly have a major impact on the construction industry.
Whatever the Budget holds for the construction industry, it is clear that we are facing a year of upheaval, with Brexit and the impact of the coronavirus weighing heavily on people’s minds.