Autumn statement: Something feels different

Statements from the Chancellor of the Exchequer aren’t always cause for celebration, but this one has left us feeling cautiously optimistic. Chris Coxon, Head of Marketing at Eurocell plc, takes a view.

Wrapped up as the National Productivity Investment Fund – £23bn between 2017 and 2021 – Chancellor Phillip Hammond’s Autumn Statement outlines investments in housing, transport, digital communications and R&D. Within that there’s a £2.3bn housing infrastructure fund, £1.4bn for affordable housing and £1.7m for accelerated construction to speed up house building on public land. This is obviously welcome because of the pressing issue of housing affordability.

If the Government can pump-prime supply then it would be hoped eventually that the improvements in meeting demand would reduce prices – at least at the ‘bottom’ end – and enable the next generation of home ownership.

(As an aside, one topic rarely discussed in respect of housing affordability is how much money large mortgage payments and high rents take out of the real economy, such payments vanishing into institutions and funds and not into the high street).

We will have to wait for the detail of policy in the expected Housing White Paper, to be published ‘shortly’, according to the Treasury. There have been strong hints that offsite construction will feature strongly.

Admittedly, we’ve been here before: construction is a cyclical affair. When skills shortages threaten, thoughts turn to factory-based production; call it prefab, offsite, modern methods of construction, pre-manufacture or flying factories. This would represent a radical departure from how building products currently arrive on site, and caution needs to be maintained if whole sectors of manufacture are not to be detrimentally impacted by this.

The difference this time – maybe – is that this Government understands that its ambitious housing targets will not be met without a sea-change in how housing is delivered and – here’s the important bit – that policy must drive a change. To achieve its targets of 200,00 builds (some say 250,000 to 300,000 are needed) per year, the current methodology has to be challenged and the regime appears to at least be mindful of that, if not quite yet offering solutions.

The exciting bit, for us, was news of the creation of industrial strategy challenge fund – loosely based on the US’s DARPA programme. The areas which the fund will focus on will be decided in due course, yet let’s hope it doesn’t get too hung up on ‘funky’ tech, and encompasses more prosaic sectors such as ours.

And there’s something for innovators in the tax regime too. As the statement said: “To ensure the UK tax system is strongly pro-innovation, the government will review the tax environment for R&D to look at ways to build on the introduction of the ‘above the line’ R&D tax credit to make the UK an even more competitive place to do R&D”.

Depending on how both these initiatives play out, it sounds like good news at the moment and the right words and actions from Government provide some reassurance that our investment in innovation today will bear fruit tomorrow.