The Chancellor of the Exchequer has presented to Parliament what he called a ‘budget for long-term growth’ but with little in it for construction.

This Spring budget, which is likely to be the last before the General Election, was delivered to a House of Commons even more fractious than usual, and came with no surprises and seemingly little ambition.

The more eye-catching measures, such as the abolition, or rather reform as it turn out, of the Non-Dom status, and a 2p cut on National Insurance contributions, had been widely trailed in the media for the past few days.

Generally, the focus remained on macro-economics, public service productivity, tax breaks for the creative industries (in particular film and television production), and investment in R&D and manufacturing projects across the life sciences, automotive and aerospace sectors.

Jeremy Hunt’s latest effort is certainly likely to come as a disappointment to the construction industry. Despite a reiterated commitment to housebuilding and infrastructure, there is no mention of “construction” in the 98-page support document. “Decarbonisation” is only mentioned once, and only in reference to a policy announced in December 2023: the introduction of a Carbon Border Adjustment Mechanism.

This will be an unwelcomed lack of development for the BMF, which, a few weeks ago, was calling on the Chancellor to initiate a “nationwide programme of retrofitting homes”. This did not happen. In fact, Hunt didn't even mention climate change in his hour-long speech. Neither did he attempt to tackle the country's skill shortage despite claiming to want inactive workers to join the job market. 

John Newcomb, BMF CEO, said: “The Chancellor has missed an opportunity to get Britain building again, with little of real consequence in a budget designed to buy short term electoral support rather than promote the long-term economic success of the country.

“Despite a steep decline in housebuilding over the past 12 months, there was no fresh, impetus to speed the building of new and affordable homes in areas where they are most needed, Nor was there support for a vital national retrofit strategy – a key BMF ask of the Chancellor - that would  improve the energy efficiency of our existing homes, generate new skilled jobs, and boost local growth throughout the country.

“The budget speech was an exercise in clearing the decks before the General Election. We cannot help but be disappointed at the lack of fresh impetus for our supply chain, given the economic and societal benefits of new house-building and improving existing homes.”

There were announcements of grants to specific building and housing projects (in Cambridge and Canary Wharf for example), but besides the cut in National Insurance, few measures seem likely to have an impact on the industry.

Possible limited exceptions are the continuation of the 5p cut and freeze on fuel duty until March 2025, and, for smaller businesses, a rise of the VAT registration threshold to £90,000 from 1 April 2024 (the first such increase in seven years), and an extension of the Recovery Loan Scheme, which is being renamed the “Growth Guarantee Scheme”.

Dr David Crosthwaite, Chief Economist at BCIS, commented: “The Spring Budget has continued the trend of fiscal events being distinctly underwhelming for the construction industry. There was very little in it that would give confidence to investors or to firms who are operating in still very challenging conditions.

“The Chancellor says he has a plan for ‘sustainable, long-term growth’ but we’re simply not seeing evidence of that in the announced policies and investment.

“Despite construction being a key lever of economic growth via the multiplier effect, there was no increase in spending announced.

“The repeated commitments to housebuilding were limited to only certain areas and schemes and there remain many questions over how the government intends to increase efficiencies in the planning process.

“Likewise, the claim of investing in infrastructure is there, but still not enough detail following the cancellation of HS2 Phase 2 and promised ‘Network North’ plans.

“Construction needs investment. We need more major projects to stimulate the economy and get Britain growing again.”

In conclusion, this statement, which was one of the Conservative party’s last chances to rescue its failing prospects in the polls, was a missed opportunity to support a sector of the economy, which, not long ago (during the pandemic), the government recognised as essential.

Even with the limits imposed on him by the challenging economic circumstances the UK finds itself in, the Chancellor's budget was a lack-lustre attempt at tinkering around the edges, with little sign of the hunger one would expect from a dynamic government about to enter the fight for its very survival.