Thank me no thankings, proud me no prouds
As usual it seems, Chancellor Darling’s last Pre-Budget Report for this Parliament (possibly ever), was a mixed bag full of , well, not very much. I suppose you could call it another curate’s egg, although not a particularly nice egg.
One thing, obviously, that was very welcome news was the boiler scrappage scheme. If nothing else it shows that governments can, when it suits them, listen to industry and do something that will be of benefit all round.
125,000 Band G boilers isn’t very many in the great scheme of under-efficient boilers out there, but it is a start and replacing all 125,000 will save something like 150,000sq ft of carbon emissions that would otherwise be chucked out into the skies. So, boiler scheme: good. Thanks Darling.
Money going into extending insulation under the Warm Front programme: good, even though the delivery of insulation leave a bit to be desired as far as merchants are concerned. Thanks Darling.
And, that seems to be it. Pretty much everyone else is disappointed. The Construction Products Association wanted the Chancellor to ensure that capital investment over the longer term did not fall below 2.25% of GDP. What we got was his assurance that it will, in fact, fall from 3.5% in 2009/10 to 1.3% in 2013/14. Thanks a lot, Darling.
The FMB wanted to see measures to encourage homeowners to green-up their homes – what they got was VAT back up to 17.5% which they see as a positive disincentive to spend. So thanks a lot, Darling.
BMF and the Get Britain Building coalition wanted to VAT reduced on certain areas, namely on housing repair, maintenance and improvement works as a way of boosting spending on construction work and products. Didn’t get that, either. Thanks a lot, Darling.
Nor did we see any extension of the credit insurance ‘top up’ scheme, a reduction in CCA discount from 80% to 65%, or an increase in the number of products eligible for a lower rate of VAT because of their contribution to energy or water efficiency, all measures called for by the industry.
Not surprising really. This was always going to be a ‘holding’ report, with the main eye on the election which will have to be in June at the latest. And that’s another issue. Think back to previous elections: there is always uncertainty and evidence of spending being held back until an election is over. Whether we are talking about big commercial projects or smaller household extensions and decorating work, very few want to make big purchasing decisions until they know what they’re dealing with, government-wise. It happened in 1997 and that was when Labour took over an economy in thumping good shape.
So I don’t think we can expect to see any great improvements in business until well after we know whose going to be in power. Whoever gets in is going to have to deal with the after-shock of the recession and the credit crisis and that phenomenal financial black hole that was our banking industry. Over to you, Darling. Or Osborne. Or whoever.