Iain McIlwee, chief executive of the British Woodworking Federation (BWF), has described the recent Summer Budget as: “a complex budget for businesses in our sector, the true impact of which probably won’t be known for a while”.
He went on to warn that while the government’s continued commitment to new home building and infrastructure was very welcome, ‘on closer scrutiny’, the Summer Budget could turn out to be one of “indirect and hidden costs to the construction industry, the very engine of growth the Chancellor is depending on most”.
McIlwee said: “Like others, we have serious concerns about the future security of income for housing associations and their likely ability to maintain their development or refurbishment programmes.
“Changes to the tax breaks for private landlords are less than expected, but could also impact on the funds available for domestic RMI work (home repair, maintenance and improvement), which is so essential to the refurbishment to our ageing housing stock.
“And looking at the direct impact on SMEs in the construction supply chain, while an increase in the minimum wage for the lowest paid is welcome, we cannot ignore the fact that such increases have a knock-on effect throughout a business, creating inflation in a firm’s total wage bill.
“Our latest State of Trade survey among Britain’s joinery manufacturing firms already reveals that 73% of respondents had seen a sharp increase in labour costs, and this is fast becoming a constraint on business. Wage inflation and other increases in the cost of doing business, such as the IPT increase, will need to be properly offset by the cuts in Corporation Tax and increases in employment allowances.
“We always welcome government support for apprenticeships – the joinery sector has the highest ratio of apprenticeships in construction. But we really were hoping for more detail on apprentice reform, and there are many questions about how the Apprenticeship Levy on big firms will be delivered and the interplay with the current CITB levy. This is an area which we will continue to scrutinise closely.”
The UK wood products manufacturing sector is a vital part of the construction industry, adding £3.8 billion to the UK economy every year. Carpentry and joinery also represents the third largest sector of employment in construction.
