Spring Statement ‘did not deliver’ for plant industry

The red diesel subsidy for construction is being removed from April

THE construction plant sector has reacted with dismay to the lack of relief given to the industry in the Spring Statement issued by UK chancellor Rishi Sunak.

Kevin Minton, chief executive of the Construction Plant-hire Association (CPA), said that ‘regrettably’, calls for the super-deduction allowance (SDA) to be extended were not acted upon.

“We are also disappointed that there has been no acknowledgment of the hardship, and no relief given, for companies in our sector adversely affected by the change from red diesel,” he added.

“The chancellor recognised the need for business investment in the UK to rise, however, UK plc cannot wait for government action or plans in the Autumn Budget – we need to see that now.”

The chancellor did announce a cut of 5p per litre in fuel duty in an attempt to help families and businesses cope with soaring fuel costs in recent times. And from July, the starting threshold for paying National Insurance will rise by more than £3,000 to £12,750.

Suneeta Johal, CEO of the CEA (Construction Equipment Association), said the statement ‘did not deliver’, describing it as ‘an exercise of smoke and mirrors’.

“Petrol and diesel prices have soared in recent weeks hitting an all-time high – whilst today’s announcement of a fuel duty freeze and the temporary cut of 5p per litre is welcome, in reality, it will do very little in the way of easing the burden on the construction sector, where despite extensive lobbying, government has ignored pleas for a delay of the reform of the red diesel and biofuels rebate,” she said.

“Spiralling energy costs are crippling the sector and the situation has worsened due to the Russian war on Ukraine. The lack of support for businesses is deeply disappointing. The VAT cut on energy-saving devices, such as solar panels, has marginal benefits. So we wait in anticipation to see what the energy supply strategy will bring next week.

“Investment in alternative sources of power was overlooked and is an opportunity missed.

“The National Insurance rise is still going ahead and although the raising of the threshold to £12,570 before NI is paid will go some way to help – it’s still not enough for the employer and will add to costs when businesses are already experiencing labour and worker shortages. However, the increase of the employment allowance for small businesses to £5,000, which is a tax cut worth up to £1,000 for half a million small businesses is welcome.”