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Industry reacts to the autumn statement

Leading industry figures react to the headline announcements made within chancellor George Osborne’s autumn statement

Glenigan economics director Allan Wilen said: “The stronger economic performance will be especially welcomed by the construction industry, with economic growth of 2 per cent or more usually a prerequisite for higher construction output.

“The cuts to the Energy Companies Obligation programme are disappointing and threaten to depress home energy-efficiency work”

“The chancellor’s commitment to support new housing supply is encouraging. In addition, the £1,000 business rate discount on small retail premises and the halving of the rates for new occupants may boost the flow of retail and leisure refurbishment and fit-out projects.

“The cuts to the Energy Companies Obligation programme are disappointing and threaten to depress the flow of home energy efficiency work at a time when the Green Deal has yet to gain traction.

“In addition, the prospects for the many onshore windfarms being tracked by Glenigan became more uncertain following the strike prices announced in the National Infrastructure Plan yesterday.”

UK Green Building Council chief executive Paul King said: “The chancellor is right to say ‘going green doesn’t have to cost the earth’ - if only he practised what he preached.

“Tax cuts for shale gas are a stark comparison to the butchering of ECO we’ve seen this week, a scheme which was helping many households with the cost of living crisis through lower energy bills.

“The emphasis on housing and infrastructure is welcome, but he’s missed an open goal by not recognising the potential for construction to deliver green growth.”

Countrywide Land & New Homes managing director James Poynor said: “We welcome the chancellor’s plans to encourage the building of more new homes in the UK.

“£1bn to stimulate supply and unblock key development sites will be welcome news to housebuilders”

“Government schemes such as Help to Buy have been very effective in boosting demand for property and helping more people to buy their own home, but there is still a chronic lack of new homes being built despite the industry’s best efforts.

“£1bn of government investment to stimulate supply and unblock key development sites around the country will be welcome news to housebuilders, as well as the continued regeneration of sites and ongoing reforms to planning measures to get the UK building sustainably again.”

Forum of Private Business head of policy Alexander Jackman said: “There are some positive measures in today’s speech to help reduce the costs of doing business.

“With fuel duty frozen, £1,000 rebate on business rates and a subsidy on employing young people, there are measures worth thousands to small businesses.

“It’s good to see the chancellor has listened to the concerns of small businesses around rising costs”

“Within a time of constrained budgets, it’s good to see the chancellor has listened to the concerns of small businesses around rising costs.

“Of course there are other issues not addressed directly today, but upon which work is ongoing. Top among these is energy prices. We are working hard to ensure members benefit from any reining back of green taxation.”

British Property Federation chief executive Liz Peace said: “We are delighted that the chancellor appears to have heeded our calls – and those other business groups – to commit to a review of business rates, as well as taking short-term action to mitigate the harm that continues to be caused by this archaic property tax.

“We urge government to think further about reforms to the business rates regime that would allow property owners to invest”

“However, simply tinkering around the edges of the system will not be enough – the business rates regime remains one of the greatest barriers to investment in the built environment, and is fundamentally unfit for the 21st century.

“Action to support the re-use of empty shops is particularly welcome. Empty properties blight our high streets and town centres, and we would urge government to think further about reforms to the business rates regime that would allow property owners to invest further in these properties.”

Mace Investments chief operating officer, David Grover said: “While we welcome the continued focus on housing, the issue isn’t just about funding. The partners behind projects need to work together effectively to unlock stalled schemes and there needs to be a clear path to escalate difficult issues that may be hampering progress. Potential investors and developers need to have a greater level of security that there is a willingness on all sides to get schemes moving.

“Government and local authorities need to be taking a longer term view to realising returns from their high-value social housing. Local authorities in particular need the right skills sets internally or via partners to fully assess the potential value that can be realised from these assets and how to engage with investors and developers rather than simply focusing on the quick sale.”

UK Contractors’ Group director Stephen Ratcliffe said: “With some early signs of optimism emerging within construction, what the industry needed was measures to boost confidence on future activity.

“The updated infrastructure plan setting out £375bn of future projects was very welcome, and provides firms with greater certainty on the volume and pattern of future work. UKCG members will continue to work with government to bring these projects through to delivery.

“The recent shifts in energy-efficiency policy have caused confusion and affected confidence for contractors”

“Diversifying sources of finance will be central to getting these projects off the ground, and the £25bn that insurance firms will now invest in infrastructure will help unlock alternative funding.

“However there remains uncertainty for firms over plans for green levies and energy-efficiency.

“The energy-efficiency market employs a large number of people and SMEs, and the recent shifts in policy have caused confusion and affected confidence for contractors in this area.”

Federation of Master Builders chief executive Brian Berry said: “In his autumn statement George Osborne says he is backing British business and British families, and correctly named housing as the general public’s top infrastructure priority.

“The chancellor has missed an opportunity to reduce VAT on housing renovation and repair”

“However, the government continues to focus on big-ticket projects such as road and rail, which will be years in the planning and are unlikely even to begin within the term of this parliament.

“The chancellor has missed an opportunity to reduce VAT on housing renovation and repair. This would deliver an instant economic fillip to millions of households that are struggling with the ever-increasing cost of living and give Britain’s builders the boost they need to capitalise on the recovery.

“Furthermore, diverting £4bn raised annually in carbon taxes into a mass programme of publicly-funded energy efficiency improvements would help those who can’t afford to pay for this work up front. Not only would this lift millions of the most vulnerable out of fuel poverty, it could also provide more than 70,000 new jobs by 2015.

“Much more needs to be done to address a chronic lack of investment in housing, which the chancellor claims he views as a key priority”

“We welcome steps to cut corporation tax and extend business rates relief for small businesses, and there’s good news too on 20,000 new higher apprenticeships and the freeze on fuel duty.

“Raising the cap on local authority borrowing by £300m to improve or build social housing is at least a start, but much more needs to be done to address a chronic lack of investment in housing, which the chancellor claims he views as a key priority.”

WSP head of development Ian Liddell said: “The reality is that you can’t have houses without roads, water and energy supplies, so it’s extremely good news that the government will be funding infrastructure to unlock stalled developments.

“There is a real crisis looming; we still have a massive shortfall to make up across the UK”

“This is something that in the past has been a major barrier. However, as ever the devil is in the detail and what we really need is infrastructure investment to be aligned to development and the planning system to reflect the need to accelerate progress.

“There is a real crisis looming; we still have a massive shortfall to make up across the UK. In London alone we need the equivalent of 30 Shards or two Hyde Park’s worth of development every year until 2020 to keep pace with predicted demand.”

Pinsent Masons head of infrastructure Richard Laudy said: “The industry will welcome the chancellor’s clear statement of commitment that if we are serious about our country, we need to be serious about our infrastructure. But is this more smoke and mirrors?

“This statement of commitment plus the improved figures for economic growth, coming so soon after the Beijing visit, should further enhance Britain’s credentials with the Chinese as a safe haven for investment.

“There are still some hard calls to be made before Britain can put clear water between itself and others competing for Chinese money”

“However, if we are to attract foreign investment, we will need to remove some of the barriers to entry and here there are still some hard battles to be won – our procurement, planning and labour laws are perceived by Chinese investors to add to delays and cost. 

“The chancellor talked about more tough decisions to be taken and in the context of infrastructure, there are still some hard calls that need to be made before Britain can put clear water between itself and others competing for Chinese money. “

Chartered Institute of Housing chief executive Grainia Long said: “We are pleased that the chancellor has acknowledged the principle that councils should be allowed to borrow more so they can build more homes, which CIH has been calling for. 

“But the steps announced today are far too modest and there is a risk that any gains could be offset by the requirement to sell high-value social housing and the expansion of Right to Buy.

“Any measure aimed at speeding up the delivery of new homes is welcome but as always the detail will be crucial”

“The finer details will be crucial – it is critical that the overall package results in a net increase in housing investmentand new homes.

“Local authorities already have powers to sell off council housing and it is unclear whether selling off valuable homes is always the best way of doing business – councils may also want to borrow against the value of these properties so they can fund more homes.   

“We welcome the news that £1bn will be allocated to unlock large housing developments – any measure aimed at speeding up the delivery of new homes is welcome but as always the detail will be crucial.

Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn said: “As we’ve been saying for a long time, the lack of housing supply is crippling the property market.

“If Help to Buy is to remain, Right to Buy extended, and expensive social housing sold off then the government’s commitment to building houses simply must be extended.

“Business rates are currently imposing a very heavy burden on SMEs and today’s measures provide real support for business growth”

“The £1bn of loans to unblock housing development across the country will contribute towards housing need and will drive construction jobs.

“However, we still believe housing is not at the centre of a coordinated property-led growth that supports a balanced regional recovery where all can access the market. The increase in the HRA borrowing cap will only make a very minor dent in the housing deficit.

“Business rates are currently imposing a very heavy burden on SMEs and today’s measures provide real support for business growth.

“The reoccupation relief will go some way to regenerate the high street at time when the latest RICS Commercial Survey shows an upturn in interest in retail space.”

CBI director-general John Cridland said: “We have always advocated the dual approach of tackling the deficit and driving growth – the OBR forecasts confirm it is working. Let’s stick with what works.

“It was a missed opportunity not to support our hard-pressed energy intensive businesses which are also struggling with rising costs”

“The pressure on the high street has been recognised; the 2 per cent cap on business rates and discount for very small businesses are positive, as is the reoccupation relief.

“Abolishing a jobs tax on employing young people under 21 will make a real difference and help tackle the scourge of youth unemployment.

“But it was a missed opportunity not to support our hard-pressed energy intensive businesses which are also struggling with rising costs, and the package on housing supply could have been more ambitious.

“As we enter the festive season, positive news on growth is clearly welcome but much remains to be done if the benefits of economic recovery are to reach every home in every corner of the UK.”

James Pargeter, head of residential projects at Deloitte Real Estate said: “The chancellor’s autumn statement acknowledged that the UK housing market has ‘started to normalise’. 

“A closer inspection of the specific measures indicates that the residential sector will be left wanting more

“However, this improvement is from a low starting point and it is noted that current weakness of housing supply means continued strong growth in housebuilding is needed. 

“The headline message is that the government will ‘take further action to increase housing supply’, but a closer inspection of the specific measures indicates that the residential sector will be left wanting more.

“One of the key measures will fund the development of infrastructure to unlock large housing sites. This £1bn fund appears to be new and sites mentioned in the speech are in Manchester and Leeds rather than the South-east. 

“Many will feel the funding is too diluted to make a really significant difference to overall UK supply

“However, the funding will come in the form of loans and will be spread over six years, which many will feel is too diluted to make a really significant difference to overall UK supply. Nine sites have been identified in the first year, 2014-15.

“A small step in the right direction is more funding for new affordable housing, which is being made available by raising the limits on Housing Revenue Account borrowing.

“The Chartered Institute for Housing (CIH) had calculated that an increase of £7bn would allow the building of 75,000 homes over five years. 

“The measures announced today are for an additional £300m borrowing to be permitted.

“Furthermore, funding is proposed to come from the sale of vacant high-value social housing stock, which will be a controversial move due to the potential erosion of mixed communities in high-value areas. 

“Securing additional borrowing for development against these assets, rather than selling them off, might seem worthy of consideration as a long-term alternative.”

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