Budget Day 2021: How will it affect the construction industry?

As the UK vaccine programme slowly brings the country back to its feet, millions of us are more interested (or concerned) than ever to see what the financial implications of this devastating pandemic will be on our future. So when Chancellor Rishi Sunak arrived with his red briefcase on Budget Day, all eyes fell on the House of Commons to see what was in store.

Notable details of the Budget 2021 announcement are as follows:

• Furlough scheme extended until the end of September
• Self-employment income support scheme extended
• £20 a week rise in Universal Credit to continue for another six months
• 'Restart' grants worth £5bn for companies to get going after lockdown
• 5% VAT rate extended until end of September
• Stamp duty holiday extended until June
• Corporation tax increase to 25% in 2023

Speaking of the investments put into infrastructure and apprenticeships, CITB Policy Director Steve Radley said: "Similarly to our own shared apprenticeships scheme, this will help support thousands of people into the construction industry just as employers are looking to hire them. Many employers reluctantly opted out of taking on an apprentice last autumn and extending the incentive to employ them is the right support at the right time.   

“Extending traineeships will build stronger links with Further Education and build a bridge into apprenticeships and jobs for many young people. Our work with FE and employers on construction traineeships has demonstrated that both groups are committed to making this work.

“Government should build on this by quickly delivering on its pledge to help Apprenticeship Levy payers transfer their unspent funds to where they are needed, giving many smaller firms the firepower to drive the acceleration in apprenticeships to deliver the jobs-led growth the PM has promised.”

Commenting on the extension to the stamp duty holiday and introduction of a government-backed 5% mortgage in today’s Budget, Tom Brown, Managing Director of Real Estate at Ingenious, said:  “The Chancellor’s decision to extend the Stamp Duty Land Tax (SDLT) holiday and provide a Government-backed guarantee to mortgages with deposits of just five per cent reflect the importance of maintaining optimism in the UK housing market.

"This level of support shows that the Government continues to view the housing market as key to the UK economy at a time when the latest Nationwide House Price report confirmed that demand from buyers is being sustained.

"The support provided by the SDLT relief extension, saving up to £15,000 on property purchases of £600,000 is positive news for our strategy as an alternative lender focused on the affordable end of the market."

Brian Berry, Chief Executive of the FMB, said: “In the year of COP26, the Chancellor missed an opportunity in today’s Budget to show global leadership with a long-term plan to make our homes greener, healthier, and more affordable to run.

"The Government’s commitment to green growth must include backing for a National Retrofit Strategy – an oven-ready infrastructure plan that will tackle climate change, level up, and create jobs. While we welcome the funding announced for the UK Infrastructure Bank, we expect to see it use its focus on climate change and regional growth to back Britain’s army of small builders who stand ready to help build back better, and greener.”

Berry concluded: “In better news, builders who are struggling to recover from the pandemic will welcome the extension of support set out by the Government today, particularly those in Scotland who are still unable to work inside people’s homes. I am glad the Chancellor listened to the FMB's calls to extend the Stamp Duty holiday. New Government guarantees on 95% mortgages will also boost confidence and protect jobs.

"What’s needed now is increased investment in local authority planning departments so that we can get shovels in the ground on small sites. The doubling of support for businesses that hire an apprentice is also a win for the FMB. 71% of construction apprentices are trained by small to medium-sized (SME) firms, and the extra support for my members is welcome.”