Reaction to the Autumn Statement was mixed, with a positive response for measures to support housebuilding but widespread feeling that the promises must be followed by action.
Industry reaction to the Autumn Statement
Published: 09 December, 2013
Industry reaction to Chancellor George Osborne’s Autumn Statement last week was mixed, with a positive response to the increased commitment to infrastructure but widespread feeling that the promises made by government must be followed by action.
The Builders Merchants Federation (BMF) welcomed the commitment to housing, but said that the government missed an opportunity for genuine reform of property taxes.
John Newcomb, managing director of the BMF, said: “It’s good news that the Chancellor remains committed to investing in housing, stressing that more has to be done to build new homes, continuing both Help to Buy and the new buy schemes, and making £1bn available in new loans to unblock stalled social housing developments in the north. Housing is a key driver to economic recovery and it is vital that [the Chancellor] follows through with this intent.”
However, the Chancellor missed an opportunity for genuine reform of property taxes, according to Mr Newcomb, who added: “While we welcome the extension of business rates relief for smaller businesses for a further year, the Chancellor could have gone much further here. What’s needed is a freeze in business rates ahead of genuine reform property taxes and the government is wrong to defer the next business rate revaluation, which was due in 2015 until 2017.”
Echoing Mr Newcomb’s thoughts on measures to support housebuilding in the UK, Andrew Halstead-Smith, group marketing manager at Ibstock Brick, said: “We are pleased to hear of the commitment to £1bn of loans to unlock large housebuilding developments. In addition, the inclusion of two more banks in the Help to Buy scheme marks a further boost to this initiative, which is helping to drive demand for bricks.”
Mike Quinton, chief executive of the National House-Building Council, added: “As our new home registration statistics show, the number of new homes being registered continues to improve on last year’s figures with an overall 24% increase for the rolling quarter August to October compared to the same period in 2012, but this recovery has been from a very low base.
“It is therefore crucial that the government delivers these policies to help the UK get back to producing the volumes required to meet the demand for quality, new homes.”
Reducing the cost of the Energy Company Obligation
Meanwhile, the Autumn Statement delivered no real surprises on the energy front according to industry figures. The Chancellor confirmed that the Energy Company Obligation (ECO) scheme will be scaled back in order to provide householders with further cost savings on their energy bills – saving them around £50 a year.
Originally intended to finish in March 2015, the ECO scheme will now be extended until March 2017 for low income and vulnerable households, meaning that energy suppliers will have an additional two years to meet their targets.
Ideal Boilers’ marketing director James Parkinson said: “It’s good that the government is taking action to tackle rising fuel prices, and we welcome the news that the ECO has been extended.
“The priority for us is to see stable business opportunities for our installer customers and people managing their energy bills and living comfortably.
“Extending ECO provides this stability, as the scheme will be helping those living in fuel poverty for a number of years.”
Simon Osborne, head of product and channel management at Baxi, added: “A £50 annual saving on energy bills shows that the government is at least trying to reduce the pressure being felt by householders when it comes to paying gas and electricity bills.”
However, while identifying that the changes to environmental levies on energy bills will lower domestic energy costs, Mr Newcomb expressed his disappointment that they will also “reduce the improvements in home insulation currently offered through the ECO”. He went on to say: “This will undoubtedly hit the insulation industry. Many industry voices have condemned this and while so much of our housing stock still needs upgrading it seems a very shortsighted move.”