David Pollock, group CEO of the Electrical Contractors' Association (ECA), has described the emergency Budget as a "mixed bag" for the building services industry.
"The UK needs a reduction rather than an increase in VAT relating to household repairs and maintenance," said Pollock. That would encourage more work across the building services and wider construction industry – above all, to support the sustainability agenda. This, he said: "is particularly pertinent as the government is calling for the 24 million homeowners with energy inefficient properties to invest in measures that will improve the carbon footprint of their homes. Retrofitting is the only way to do it but will only be successfully if homeowners feel the benefit of their actions, without incurring prohibitive costs; financial incentivisation will be key."
Pollock welcomed George Osborne's stance on National Insurance for new SMEs outside London, voicing his hopes that this could encourage businesses to channel resources to train apprentices. He said: "Investing in apprenticeships should be a key priority for businesses, even in these challenging financial times. The sector is greying, and we need to look at nurturing the next generation – from homegrown future captains of industry to on-the-ground craftspeople – if we are going to achieve economic stability and contribute to the growth of UK Plc."
Pollock added: "The decision to reduce Corporation Tax on a sliding scale – four pence over the next four years – is also a very positive move which will also free up funds for firms to weather the current economic storm and to invest in the long term future of their business, which includes the training of apprentices and general succession planning."
Pollock hailed the government's pledge to protect capital spending as significant, saying: "Public sector projects represent a significant level of work for the construction and building services industry, and the government's decision to protect capital spending can only have positive consequences for our sector."
Pollock concluded: "I recognise our current economic situation is dire and requires drastic budget cuts, coupled with an increase in some taxes. However, the government pledged its support on a number of critical issues, in particular business and sustainability and as such, we believe that reducing VAT on household maintenance and repairs would have been an obvious way of killing two birds with one stone. First, it would have encouraged people to commission work in a way that could positively impact the economy, and second, help drive forward the government's legal obligation to cut carbon emissions by 80% by 2050."
