Suneeta Johal, CEO of the CEA, said that the measures set out in Chancellor of the Exchequer Rishi Sunak's budget speech had ignored industry pleas for a delay of the reform of the red diesel and biofuels rebate.
“This mini-budget was an opportunity for Rishi Sunak to take significant action to help businesses to minimise the impact of rising inflation, which is at a 30-year high and continues to rise," she added. "This Spring Fiscal Statement comes at a critical time for manufacturing in the UK – and as expected it did not deliver and was very much an exercise of smoke and mirrors.
"Petrol and diesel prices have soared in recent weeks hitting an all-time high – whilst today’s announcement of a fuel duty freeze and the temporary cut of 5p per litre is welcome, in reality, it will do very little in the way of easing the burden on the construction sector, where despite extensive lobbying, Government has ignored pleas for a delay of the reform of the red diesel and biofuels rebate.”
Johal added that spiralling energy costs are crippling the construction equipment sector and the situation has worsened due to the Russian war on Ukraine. She said that the lack of support for businesses is "deeply disappointing".
"The VAT cut on energy-saving devices, such as solar panels, has marginal benefits. So we wait in anticipation to see what the energy supply strategy will bring next week," said Johal
She added that investment in alternative sources of power was overlooked and is an opportunity missed.
"It was immediate help our sector needed - and once again Government failed to deliver," she commented.
The UK Mineral Products Association has welcomed the 5p a litre reduction in fuel duty announced by Chancellor Sunak in the Spring Statement, but says it is disappointed not to see a change of mind on Red Diesel with fuel costs skyrocketing at a time of high inflation.
MPA CEO Nigel Jackson said: "Taken in the round today's statement does little to ease the worsening cost burden on industry, particularly energy and carbon costs, nor does it boost demand and give the confidence to invest in the short term or more strategically for the longer term."
Earlier this month, MPA, whose members produce 400 million tonnes of materials for UK building and manufacturing each year, wrote to the Chancellor to request a delay in the removal of the red diesel rebate, as well as calling for urgent action on soaring energy costs and transparency on delivery of the Government's infrastructure plans.
Further industry reaction came from training body the Construction Industry Training Board, whose strategy and policy director Steve Radley said: “The inclusion of insulation in the statement today is of real interest for us and industry. Meeting Net Zero in construction is demand-led and the removal of VAT on energy saving materials is likely to cause a significant increase in the need for low-carbon skills.
“This tax cut will help to create the confidence industry needs to invest in retrofit training."
The Chancellor said the government will be looking at the issue of employment training in the private sector, which will be reviewed as part of the government's new tax plan, including assessing whether the Apprenticeship Levy is 'doing enough'.
Radley commented: “CITB will continue to work with the government on apprenticeship levy reform as apprenticeships are the main route for employers in our industry to get the skilled workforce they need in recovery. Apprenticeship starts are recovering but it’s vital that we continue to drive numbers up.
"Critical to this will be building on recent reforms of the Apprenticeship Levy Pledge Service to ensure unspent levy funds from larger companies can be accessed by small employers to provide more apprenticeships.”
The Chancellor’s decision to slash VAT to zero percent on home energy saving measures will help boost the drive for greener and more energy efficient homes, according to the Federation of Master Builders (FMB).
FMB chief executive Brian Berry said: “With 29 million homes in the UK, of which many are leaky and energy inefficient, decarbonising our existing housing stock represents an important piece of the net zero puzzle.
"Historically, consumers have not been properly incentivised to commission green upgrades to their homes. This VAT cut will help householders insulate their home at a time when energy bills are escalating. It will also provide a much-needed boost to local builders operating in the retrofit market. The Government now needs to build on the VAT cut and implement a long term National Retrofit Strategy to provide business certainty.”
