Sector Reponds to Jeremy’s Budget

CEO of The Hydrogen Energy Association (HEA) Celia Greaves

“Giga has the potential to release billions in private investment in clean energy supply chains to provide products and services and will be critical for the continued development and deployment of hydrogen in the UK.

“We have been invited by the Department for Energy Security and Net Zero to facilitate input to a Call for Evidence on the funding package to support the expansion of strong, home-grown, clean energy supply chains across the country, for hydrogen and carbon capture, utilisation and storage (CCUS), as well as electricity networks, nuclear and offshore wind.

“Our input – from an association representing 120 members across the full-value chain – will help them to better understand the manufacturing project pipeline and the issues faced by the supply chain, and ultimately support DESNZ in gauging hydrogen market readiness for Giga funding, ahead of intended scheme launch in the summer of 2024.

“We are now entering a period of unprecedented growth for the UK hydrogen economy and this sort of funding could provide that valuable leap forward for the UK to continue to be a world leading place to invest in hydrogen.”

Gideon Stone, co-founder of Janine Stone & Co, the luxury residential design and build agency

 “The UK prime and super-prime residential sector is one of the few points of light amid a very difficult housing market. The sector has a strong appeal, seeing a more than 5% increase in listings over the past 12 months, with particularly pronounced growth in prime London neighbourhoods, such as Highgate, Holland Park, and Belgravia. Overall, the sector’s economic contribution is significant, generating over £36 billion across some 16,000 transactions last year.

Overseas buyers are vital to this market, accounting for 45% of purchases in Prime Central London in 2023, an increase of 6% on the previous year. As a result, Chancellor Hunt’s decision to scrap the non-dom tax regime threatens to snuff out the sector’s recovery. Too sudden or too dramatic a change in the tax system for high net wealth individuals risks transactions to grind to a halt, depriving the Exchequer of much needed revenues and the housing market of an upturn in one of its most important sectors.

Britain is blessed with a large endowment of extremely desirable luxury properties that overseas buyers wish to purchase and the Government should think carefully before jeopardizing the future of this important sector.”

Will Walker, UK Policy Lead at Ashden the climate solutions charity

“The country is crying out for bold government leadership and a credible plan to address the triple-whammy of energy security, fuel poverty and the climate crisis. This has to be done through sustainable clean growth. Any plan needs to be backed with the right powers, resources and incentives to empower communities, leverage investment, upskill and expand the workforce, and revive the economy.”

“The chancellor said he wanted to ‘build up our resilience to future shocks’. However, in reality he failed to ‘read the room’ and delivered a budget that misses the fact that citizens, by and large, care more about long-term investment in public services and getting help with their energy bills than short-term tax cuts.”

“Unfortunately, what we’ve seen over the last decade from Government is dither, delay and division on net zero. This has undermined business and investor confidence, weakened supply chains and added nearly £2.5bn to UK energy bills.

“A case in point is the home heat workforce and heat pump industry. Several net zero retreats in recent years, including the latest U-turn this week with the scrapping of the Clean Heat Market Mechanisms – sometimes given the misnomer of ‘the boiler tax’ – have meant that the industry really don’t know where they are any more. They have had their fingers burned and don’t trust government schemes, undermining the progress of a growth sector – yet again this budget neglects to provide a properly funded retrofit plan to support action that could really make a difference to the economy and help households trying to keep their costs down and homes warm.”

“Clearly the model is broken. Fundamentally, local leaders need more powers and resources devolved from Westminster, not further pressure on spending that has already been cut to the bone. Only by centering the needs of communities in the transition to net zero, reviving public services, and prioritising those most affected by it, will we get where we need to go and bring people with us.”

Dr Jonathan Carr-West, Chief Executive, Local Government Information Unit (LGIU), said:

“Local government was not entirely absent from today’s Budget. Headline announcements included a trailblazer devolution deal for the North East, devolution deals for Buckinghamshire, Warwickshire and Surrey, new Investment Zones and a series of funding deals to support housing. These will no doubt be welcome in those areas that receive them, but the Chancellor did not address the systemic funding issues in local government.

Our latest research found half of councils believe they could face bankruptcy within the next parliament. Council taxpayers are paying ever higher rates for fewer services, and leisure centres, SEND provision and adult social care funding are all facing deep cuts.

Now is the time for productive debate on the possible solutions to the local government funding crisis. Instead, the spending reductions required by this budget will increase all these pressures.

The Chancellor recognised market failures in children’s residential care and SEND support but councils will not feel that this is enough to counteract the cost increases they have faced in those areas. Similarly many in local government will note that the Chancellor’s emphasis on public sector productivity is not reciprocated by removing some of the onerous funding hoops that councils have to jump through.

We need a proper debate about how we fund local services and we need to reform council finances. This scattergun pattern of largesse granted or withheld will no longer suffice.”

Graham Harle is the CEO of Gleeds Worldwide

“As Chancellor Jeremy Hunt resumed his seat after the budget, the false bonhomie masking apprehension on colleagues’ faces spoke volumes. With an election around the corner, if it was supposed to buy the government another term of office, I would imagine many Tory MPs will be ordering the removal van. Construction and property are a bell weather industrial sector as well as big employers and our numbers make for grim reading, with construction activity recording almost flat output levels in February after five months of falls. This is the core issue that the Chancellor should have been addressing – how to inspire confidence, fan growth and improve productivity. Rather than tinker around the edges doing things like increasing the VAT registration threshold by a meagre £5K, minimal investment in housing and full lease expensing “when affordable”, the Chancellor should look at the anaemic UK economy as needing a transfusion, not a sticking plaster. GDP is only predicted to be marginally higher this year at 0.8%, for instance. This was a budget to stop us bleeding out before the election, not a long-term recovery plan.”

David Hannah, Group Chairman of Cornerstone Tax

“Multiple Dwellings Relief was first implemented as means to incentivise bulk purchases and provided developers with a suitable avenue for delivering low-cost homes. At a time when demand for affordable housing has skyrocketed, the government should look to create fresh incentives for developers, instead of abolishing old ones.”

“With inflation forecast to fall below the 2% threshold in just two months time, it’s time that the Chancellor pressure the Bank of England to urgently reassess their priorities. Economies have momentum and the unnecessary continuation of record high interest rates risks further damage to the UK’s struggling housing market.

“Our data reveals that 59% of Brits on their current salary cannot afford to save for a deposit, whilst 54% of Brits claim that their family aren’t able to provide them with enough support for their first step on the housing ladder.

“The Chancellor could have used this opportunity to reform the private rental sector, measures including the abolition of the second home surcharge from rental sector investors and reinstating full relief on mortgage interest payments would have both reduced the costs of purchase, whilst also allowing landlords to freeze, or potentially cut, rents. “

The Housing Forum responds to the Spring Budget 2024

The Housing Forum welcomes the £240m announced today to unlock housing in Barking and Canary Wharf, and also the second round of funding to address the nutrient neutrality issue blocking new homes. It was disappointing not to see any other significant new funding announced for housing in today’s budget.

The housing sector has been struggling with market downturn and a raft of new regulations, making it more expensive and difficult to build new homes. The government is on course to miss its own target of 300,000 new homes a year, and there was nothing today to suggest any plan to remedy this situation. The Housing Forum’s proposals for a £4bn fund for affordable housing would enable the 60,000 households currently in temporary accommodations to have a home of their own, reducing costs for local authorities’ hard-stretched budgets and helping the housing and construction sector to retain capacity to accelerate in the future.

We’re also very concerned about the funding cuts proposed to unprotected departments like the Department for Levelling Up, Housing and Communities, over the coming years. Even more worrying is the lack of support for local authorities, many of which are on the verge of issuing Section 114 notices. Well-funded local authorities are needed to develop local plans and build much needed social housing, if councils are left in the lurch then housebuilding will decline yet further.