The UK Government has officially unveiled its Spring Budget, with a whole host of spending commitments for the electrical industry included.
In a series of articles on Electrical Review, we plan to share both the industry’s reaction as well as the top announcements from the Spring Budget, which was unveiled on March 15.
In this part four, we will detail the Electrical Contractors Association’s reaction to the budget, including the UK Government’s commitment to get people back into work. Make sure to check out all the other parts to ensure you don’t miss out.
Getting people back into the workforce
The Spring Budget 2023 had one main objective in mind for Chancellor Jeremy Hunt — to get people back to work. It offered commitments to fund childcare for one and two-year-olds, revealed a new £63 million programme to encourage retirees over 50 back to work, and even promised tougher action on those receiving benefits but were deemed fit to work.
Whether or not any of the policies will actually achieve Jeremy Hunt’s goal, it’s clear that the UK will need a robust workforce to ensure the economy grows and avoids a recession, which new Office for Budget Responsibility figures suggest that it will.
However, while it will be important to have more workers, what the UK needs more than ever is skilled workers, according to the Electrical Contractors Association.
Andrew Eldred, ECA Director of Workforce and Public Affairs, noted, “The measures announced by the Chancellor to encourage people back to work fail to address sector-specific labour and skills shortages. The extended energy bill support will provide some peace of mind, but this will be short-lived.
“To make the UK energy independent, a skilled, competent workforce is vital to maintain existing electrical Infrastructure. As the electrification of the UK accelerates rapidly, our sector needs stronger engagement from the Government to develop a flexible and competent electrical workforce in sufficient numbers to meet growing demand and ultimately help deliver Net Zero on time.”
Corporation tax could impact UK investment
In addition to the lack of substance for building a skilled workforce, the UK Government has announced that the planned increase in corporation tax would go ahead. That means companies based in the UK would see their tax liability increase from 19% to 25%.
Rob Driscoll, ECA Director of Legal and Business, warned, “SMEs are a vital part of the construction sector, which itself is the backbone of the British economy.
“Today’s corporation tax hikes come at a time when SMEs have dealt with Covid, hyperinflating labour, materials and energy costs, rising insolvencies, receding demand and increased borrowing costs.
“Today’s budget may prove to be counter-intuitive and hinder businesses’ ability to pivot into delivering our urgent Net Zero targets.
“The drive to Net Zero hinges on skilled engineering services professionals doing the frontline work to upgrade our grid, electrify transport and heating, and connect our homes and businesses to clean energy sources.”