What the Spring Statement means for the construction industry

This year’s Spring Statement was especially important for the construction industry, in a time of high inflation and rising energy costs, but what exactly was said?

Many were hoping that Chancellor Rishi Sunak would delay the ending of the red diesel rebate, however this is still planned to take effect next month to encourage use of renewable energy. 

The construction industry, however, has said that the sector will just be forced to pay more for white diesel – you can read more about this in our previous blog.

Following on from this, business rate exemptions were announced for renewable energy generation. This was originally set to be implemented in April 2023, but has been brought forward to next month. 

Research and development (R&D) got a boost, with tax reliefs being reformed so cloud and data costs could qualify for relief from April next year. 

Businesses are also set to be relieved by basic income tax dropping in 2024, going from 20p per pound to 19p. 

Green housing is another priority of the government, with VAT being slashed for these measures, such as solar panels. This currently sits at 5%.

RICS have said that retrofitting homes is a key part of the push for net-zero, so they think this is a great move to help homeowners, but that greater reform is needed to aid businesses and make more of an environmental impact. 

The topic of training the next generation is set to be looked at in greater detail in the Autumn Budget, but some have argued this should have been addressed in Spring, due to the construction industry having the highest number of vacancies in 20 years.

Some of the factors that have resulted in this include the ageing workforce, EU workers leaving since Brexit, and bureaucratic apprenticeship schemes.