In case you missed it, Rishi Sunak presented the government’s Spring Budget yesterday (4th March 2021). Unsurprisingly, the global pandemic and the billions of pounds of national expenditure that it has made necessary dominated what Sunak had to say.
As one of the UK’s largest economic sectors, the budget also included several announcements which will undoubtedly have an impact on construction. To save you time, in this week’s blog, we’ve picked out some of the key measures:
The furlough scheme will be extended until the end of September, meaning employees can continue to receive 80% of their salary for hours not worked. Employers will need to contribute 10% of this amount from July and 20% from August.
The self-employed support scheme (SEISS) will also continue, with a fourth grant available until the end of April and a fifth grant from May. People whose turnover has fallen by 30% will receive the 80% SEISS grant, while anyone whose turnover has fallen by less than 30% will receive a 30% grant. Due to some changes around which year’s tax returns can be used as evidence of previous earnings, an extra 600,000 people will now be eligible to apply for this grant.
The housing market
The 2021 budget included measures which the government say are designed to ‘turn generation rent into generation own’. As well as confirming that the ‘Help to Buy’ scheme is back, there were two other initiatives:
- A mortgage guarantee scheme which allows people who have only a 5% deposit to buy a home. Offered by most of the major lenders, he new 95% mortgages will be available from April for properties worth up to £600,000.
- The freeze on stamp duty on house purchases under £500k will be extended to the 30th June in England and Ireland. That means almost nine out of ten people buying a new home during this period will pay no stamp duty. From July, the nil rate band will move to a lower property price cap of 250k before returning to its normal level of £125,000 on 1st October. (Scottish and Welsh governments have received additional funding to provide similar support.)
Employers who hire new apprentices between 1 April and 30 September this year will receive an increased payment of £3,000 per new hire (under the previous scheme, the payment was £1,500 per new apprentice or £2,000 for those aged under 25).
From July, there will be a new £7m fund available to help employers take on new recruits via ‘portable apprenticeships’. This enables people to work across multiple projects with different employers.
Also of interest was an announcement that the government will be making some changes to its highly skilled migration policy, particularly in relation to making the immigration sponsorship system easier to use and the introduction of an elite points-based visa. More details should be published by the government in the summer.
£10m of seed funding will go towards the creation of a new Modern Methods of Construction (MMC) taskforce led by the Ministry of Housing, Communities and Local Government. Based in Wolverhampton, the taskforce will work closely with local authorities to accelerate the delivery of MMC built homes across the sector. Some authorities, including in the West Midlands and Liverpool City area, have already suggested ambitious proposals for MMC.
Support for SMEs
Rishi Sunak confirmed details of a new Help to Grow scheme, which will enable thousands of people in SMEs to take an ‘executive development’ programme at a busines school with the government paying 90% of the cost.
Another line of support comes from a scheme which will be launched in the Autumn to help small businesses develop their digital skills. The scheme will include free training and a 50% discount on new ‘productivity enhancing software’ worth up to £5,000 each.
New infrastructure around off-shore wind technology is planned for Humberside and Teesside, something which will help the UK make progress towards decarbonising energy on the electricity grid.
The ‘green revolution’ will benefit further by investment in other green industries, including the introduction of a new UK infrastructure bank which will invest in public and private projects.
Saving the best for last (or in this case perhaps the worst), we all knew that, with such extraordinary levels of national expenditure occurring, there would at some point be a price to pay.
So, from April 2023, corporation tax will rise from 19% to 25%. Sunak said it was ‘fair and necessary’ to ask businesses to make this contribution to economic recovery and that, due to the thresholds that would be applied, only 10% of companies (those with the highest levels of profitability) would have to pay the full 25%.
Like most government budgets, this one will no doubt be seen as a ‘win’ for some and a ‘loss’ for others. Given the fact that the country is still battling with the impact of COVID-19, much of what was announced was expected. Construction does seem to have been given some priority with several of the schemes offering support that will help businesses with things like hiring workers or raising skills; encourage modern or green building practices; or boost demand within the housing market. Let’s hope this all comes to fruition and that companies across our sector can continue to thrive.
Feature image: PeskyMonkey/Shutterstock.com