More investment, please!
CPA sets out Budget priorities
Published: 16 March, 2010
LONDON: The Construction Products Association has called for public sector net investment at or above 2.25% of GDP.
In a letter to the Chancellor ahead of his Budget statement, the association called on the government to prioritise capital investment and show a clear commitment that public sector net investment does not fall below 2.25% of GDP, to limit regulatory burdens placed on business that harm competitiveness, and make quicker progress towards a low-carbon economy.
The association wants the government to undertakes a review of energy-saving and water-saving products and solutions that are eligible for a lower rate of VAT and extend the Boiler Scrappage Scheme.
Michael Ankers, chief executive of the association said: "We recognise the urgent need to reduce public borrowing, which is expected to have reached £178b in 2009/10. However, the government needs to ensure that spending occurs where it is of most benefit; ensuring that recovery is not harmed and long-term growth encouraged."
Capital spending on essential housing, schools, energy and transport infrastructure stimulates economic recovery in the short-term, with crucial benefits for employment, and leaves a beneficial legacy from the investment by increasing productivity in the longer-term, he said.
The government should allocate an additional £50 million to the Boiler Scrappage Scheme, he said. "The scheme, which was launched in January this year, has already exceeded everyone's expectations in the first two months. It is estimated that on completion of the scheme 945,000 tonnes of carbon will have been saved at a cost of just £53/tonne - a much better return on public investment than many of the alternative schemes to promote renewables," he said.