The CIOB also renewed its call for a national retrofit strategy to improve the energy efficiency of UK homes.
Kwarteng unveiled a series of tax cuts, reportedly the biggest for 50 years, and hailed a “new era” for the UK economy.
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He argued that the government needed to take a new direction to get the UK economy growing again, with the Bank of England warning that it could already be in recession.
Budget measures
Among measures announced by the chancellor were:
- A discussion over setting up ‘investment zones’ in 38 areas of England, where no business rates would be payable and stamp duty waived
- New legislation to cut planning rules and environmental assessments to speed up building
- A cut in the basic rate of income tax to 19% from April 2023
- The abolition of the 45% higher rate of income tax
- The cancellation of a rise in corporation tax, which had been due to increase from 19% to 25% in 2023
- A reversal in the planned rise in national insurance
- A cut to stamp duty, including no stamp duty on the first £250,000 of a property’s value, rising to £425,000 for first-time buyers.
‘Short-term measures’
“We have for some time been calling on government to implement a national retrofit strategy to improve the energy efficiency of UK homes, for example through better insulation and reducing heat loss from doors and windows.”
Eddie Tuttle, CIOB
Eddie Tuttle, director of policy, public affairs and research at CIOB, said: “The cost-of-living crisis had to be a priority in this mini budget, and whilst we are supportive of some of the measures, we are concerned so many are consumer led and only for the short-term.
“The chancellor’s cash-driven incentives will provide some much-needed relief here and now but won’t solve the problem, and this deep-rooted long-term issue needs a long-term solution developed through joined-up policy making.
“We have for some time been calling on government to implement a national retrofit strategy to improve the energy efficiency of UK homes, for example through better insulation and reducing heat loss from doors and windows. Hopefully, the announced reduction in stamp duty will free up cash for some home buyers and enable them to make such changes. These types of retrofit measures will drive down energy consumption and bills, while also improving the health and wellbeing of residents in the retrofitted homes.
Such a strategy, he added, would also help contribute to the UK’s legally binding carbon targets, create new jobs, and deliver growth across the country. “It should be noted, however, that not all retrofit schemes require expensive or disruptive work and simple home improvements and maintenance, such as fitting draft excluders to doors and lagging pipes, can make a big difference.”
‘Lack of skilled workers’
Tuttle also said the professionals from across the construction sector regularly tell CIOB that one of the biggest issues to tackling the cost-of-living crisis is the lack of available skilled workers to install and maintain more cost-efficient household energy systems.
“The industry will be a key component to help drive growth in the coming months yet well publicised issues and cost pressures in construction, alongside the threat of inflation and weak economic growth are potential challenges it needs to be able to plan for,” he said.
Tuttle concluded: “The government must learn from the failures of the Green Homes Grant, which failed to see significant uptake in part due to the focus on short termism and a lack of skilled individuals to deliver on scale. We recommend they invest in both long-term and immediate strategies to recruit, retain, and progress workers within the sector, and incentivise retrofit measures as a way to reduce energy bills, keep homes warm and tackle the net zero crisis.”
