Chancellor Rishi Sunak promised a “new age of optimism” with higher wages, improved skills and rising productivity as he introduced his latest Budget to Parliament.
The Budget, details of which had already been extensively leaked to the press, would not draw a line under covid, Sunak said, but would “begin the work of preparing for a new economy post-covid”
It comes at a time of rising demand for goods as the world economy recovers from the pandemic, while disrupted energy supplies have left to a spike in the wholesale price of oil, gas and coal. Sunak said price inflation ran at 3.1% in September and was forecast to average 4% over the next year.
But the Office for Budget Responsibility (OBR) has also downgraded its estimate of the long-term damage caused to the economy from 3% to 2%. Meanwhile the UK economy is forecast to return to pre-covid levels by 2022. Annual economic growth is forecast to hit 6.5% this year, followed by 6% in 2022.
Among the measures announced by the Chancellor relevant to construction were:
- £5.7bn worth of “London-style” transport settlements in English cities and regions including: Greater Manchester, Liverpool the Tees Valley, Yorkshire, the West Midlands and the West of England. The package includes £2.6bn for local road upgrades, £5bn for local road maintenance, and £5bn for walking and cycling routes. The government has committed a total spend of £21bn on roads and £46bn on railways across the UK.
- A total of £24bn for housing, including confirmation of a £1.8bn fund for building housing on brownfield land. Sunak also confirmed the government’s residential property developers tax, which will be levied on developers with annual profits of over £25m at a rate of 4%, to help pay the £5bn cost of removing cladding from high-risk buildings.
- The government confirmed a £3.8bn prison building scheme, as well as an extra £2.2bn for courts and rehab facilities.
- A £1.6bn commitment to support vocational training for 16-19 year olds.
- £800m has been earmarked for upgrades to museums and galleries.
