The Chancellor declared a new age of optimism in Wednesday’s Budget. Rishi Sunak painted a rosy picture of the UK’s economic prospects and looked to support the nation’s climb out of the Covid recession by stimulating growth.
Infrastructure again featured strongly in the Chancellor’s growth plans, with the focus now on “Delivering the Infrastructure Revolution”. The Budget built on the previous announcements of the National Infrastructure Strategy of the prior year, with investment in infrastructure forecast to total £130bn over the period of the Spending Review. The key measures are mainly transport-related – over half the expenditure earmarked covers either strategic road projects or rail investment, with other projects including local transport connection and hubs, as well as the expansion of the nation’s fibre network. A lot of the measures in the infrastructure space are not new measures, capturing expenditure on HS2 and the previously announced pothole fund. Therefore, there were limited new announcements in this space, but more details on how previously announced funds are being allocated.
From an environmental perspective, ahead of COP-26 the Chancellor re-iterated the Government’s overall commitment to the wider green agenda. Today’s statement re-affirmed previous policy announcements aimed at the decarbonisation of heavy industry and the support for the continued development of low or zero-emission transport technologies. There is also funding for the development of the heat pump market; delivering on better insulation of the UK’s housing stock; support for the completion of the Sizewell C project. These latter announcements have been heavily trailed in the days preceding the Budget.
Outside of the policy announcements, there are limited new changes to the tax legislation that impact the Energy, Infrastructure, and Environment sectors. Most key announcements were made earlier in the year – particularly surrounding the increase of corporate tax rates and the introduction of the super deduction for capital expenditure on plant and machinery providing enhanced tax relief. Some measures such as reduced business rates as part of a green investment relief and the extension of the Annual Investment Allowance were included in today’s announcement.
Longer-term, the development of new measures such as the Asset Holding Company Regime and the potential benefits of free port areas may have an influence on the way businesses look to structure and approach their investments which will give food for thought over the winter months. The limited number of changes will more generally be a comfort for business overall who have been looking for greater stability in these turbulent times.
Bob Green, UK Head of Energy, Infrastructure & Environment said “The Government is continuing its commitment to both infrastructure development and raising the profile and significance of green policy measures. We look forward to future initiatives which will inevitably arise from the COP-26 meeting in November.”
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