Suneeta Johal, CEO of the Construction Equipment Association (CEA) Shares her perspective on the recent Autumn Statement by Chancellor Jeremy Hunt:
“The recent Autumn Statement by Chancellor Jeremy Hunt represents a thoughtful and strategic approach, acknowledging the necessities of the industry and introducing a forward-looking strategy to enhance investment. This statement marks a positive development, especially for the manufacturing sector, which values the emphasis on resolving enduring economic issues. The decision to make full expensing permanent provides the clarity and stability businesses require for their investment decisions.
Additionally, the new initiatives to improve engineering apprenticeships and advance manufacturing signify a proactive effort to develop high-value growth and skilled employment, shaping a robust future economy.
The Chancellor’s commitment to making the full expensing policy a permanent fixture is a landmark achievement. The ability for companies to claim 100% capital allowances on qualifying plant and machinery investments, and write off the cost of investment in one go is not just a financial boon; it’s a catalyst for accelerated growth and modernisation.
This significant policy change, a result of concerted efforts by MAKE UK, CBI and the Construction Equipment Association alongside over 200 organisations, stands as an example of the powerful outcomes that can be achieved through collaborative industry-government engagement.
However, the absence of discussion on fuel duty is particularly disappointing. In an industry where fuel costs substantially impact operations, this oversight is a missed opportunity.”
Statement in full:
Chancellor Jeremy Hunt’s initiatives were positive and we recognise them as significant steps towards establishing the UK as a leading player in innovation and sustainable technology.
We welcome the Chancellor’s initiative to accelerate planning applications, as it could significantly benefit the construction sector by enabling faster project starts and potentially reducing uncertainties. However, it’s crucial to recognise that while these changes present opportunities, their overall impact on the construction sector will depend on a variety of factors. These include broader economic conditions, the availability of funding, labour and material resources, and environmental considerations. The effectiveness of these reforms in truly shortening application times and their actual implementation will be critical in determining their tangible impact on our industry.
The Chancellor’s commitment of an additional £500 million to fund innovation centres, with a focus on AI, is a positive move. This investment not only positions the UK at the forefront of technological advancement but also promises to usher in a new era of efficiency and capability across various industries. For the construction equipment sector, advancements in AI can lead to remarkable improvements in machinery intelligence, operational safety, and environmental sustainability. The introduction of a simplified R&D tax relief system is a welcome change. By merging the existing schemes, the government is reducing bureaucratic hurdles, thus encouraging more companies to engage in innovative activities. This consolidation is likely to stimulate a surge in R&D initiatives within the construction equipment industry, fostering new developments in machinery and construction technology.
The decision to lower the tax rate for loss-making companies within the R&D scheme, and to extend additional support to more SMEs, is another positive step. It shows a clear understanding of the challenges faced by smaller enterprises, which are often the cradles of groundbreaking innovations. In the construction equipment sector, this move could energise numerous SMEs to push the boundaries of what’s possible in equipment design and functionality.
The extension of the Climate Change Agreement Scheme, offering significant tax relief to energy-intensive businesses, is particularly pertinent. It acknowledges the vital role of industries like steel and ceramics – both crucial to construction equipment manufacturing – in the transition to net-zero emissions. This measure not only aids in immediate financial relief but also incentivises investment in energy efficiency, an area of critical importance for the sustainable evolution of the construction equipment industry.
The Autumn has set a promising groundwork for innovation and sustainable growth. Recognising the UK’s potential in manufacturing, particularly in the construction equipment industry, the statement marks a step towards realising this ambition. There’s an opportunity for even greater success with targeted policies that cater specifically to the needs of this sector. Such a strategic focus will not only fuel economic expansion but also position the UK as a frontrunner in sustainable technology and innovation, furthering Hunt’s commendable efforts in this direction.
