The Mineral Products Association (MPA) has responded to the UK Government’s Spring Budget by calling for clearer action to accelerate investment, green growth and infrastructure delivery, compared to the relatively “patchy and underwhelming agenda” set out by the Chancellor.
The confirmation that the Aggregates Levy will be frozen for 2023-24 is a source of relief, although MPA is concerned that the Government plans to increase the Levy in line with the retail price index from 2024-25 onwards, and will push for this to be considered over the next year.
“The decision to extend the GBP0.05 cut in fuel duty is also welcome, although the industry continues to endure around GBP100m cost of the removal of red diesel last year. The GBP20bn over 20 years for Carbon Capture, Usage and Storage (CCUS) is a positive step towards industrial decarbonisation,” said the MPA.
The Chancellor declared this was “paving the way to CCUS everywhere across the UK”, which is welcome news for sites that are not in easy reach of the CCUS clusters.
“While the end of the ‘Super Deduction’ is regrettable, full expensing on plant and machinery investments is a welcome move that will go some way towards mitigating that, and MPA hopes it will be made permanent,” the MPA statement continued. “However, the confirmation that Corporation Tax will still rise by six percentage points is disappointing, and will hinder the Chancellor’s stated ambition to spur investment.”
The creation of Investment Zones and the forthcoming call for evidence aimed at addressing nutrient neutrality issues may help improve growth in construction activity. MPA awaits further detail and delivery in both cases. However, these measures do not compensate for the recently announced tranche of delays to infrastructure projects, including HS2 and multiple strategic road network schemes. “Putting the brakes on these projects will increase costs, cause uncertainty for industry, and deter investment,” said the MPA.
Jon Prichard, CEO of MPA, said: “The Chancellor’s announcement on funding for CCUS is welcome and important for the UK’s cement and lime producers. But following on from last week’s announcement of infrastructure delays, this Budget was a missed opportunity and does little to tackle Britain’s longstanding challenges on delivery of transport projects and housing.