Chris Pateman: cut VAT on home improvement projects.

BMF derides 'disappointing' Budget

Published:  22 April, 2009

LONDON: "A disappointing and unimaginative Budget," was how Chris Pateman, managing director of the Builders' Merchants Federation and former editor of Builders' Merchants Journal, viewed the chancellor's offering. Builders' Merchants News canvassed opinions from industry leaders and the BMF was the first to respond.

"The one good thing you can say about this Budget is that at least Alistair Darling has admitted publicly that we are in a recession - although I notice he stopped well short of taking any of the blame for it!" Mr Pateman added.

The Budget was "disappointing because his solution - huge levels of long-term borrowing to finance a rag-bag of sound bite initiatives - is based on what many of us would consider extraordinarily optimistic assumptions about the speed and strength with which the economy will recover.

"Unimaginative because in his haste to scatter crumbs in every direction in the name of 'helping those who need it most', he ends up unable to do anything really useful for anyone - even for the automotive industry, with whom the entire cabinet appears to be hopelessly in love.

"If you drive around in a car that's 10 years older or more, it may be because you can't afford a brand new one. A £2000 'scrappage' subsidy will only distort the market for second-hand vehicles and risk dealers' existing lucrative trade-in incentives being taken off-invoice and turned into incentives to buy the dealers' hire purchase schemes.

"On the other hand, committing to an ongoing programme of raising the fuel duty escalator means absolutely everything will cost more for absolutely everybody. Surely, not even Alistair Darling is able to overlook the link between the cost of fuel and the cost of delivery. But, perhaps, he thinks goods get on to building sites or supermarket shelves by some kind of self-funding telekinesis."

Mr Pateman went on to say that "the cost of taxing the 1% of the population who earn over £150 000 will outweigh much of the postulated revenue gain.

"The 'green' commitment to continue to escalate fuel price duty will have a direct and immediate effect on the cost of absolutely everything - or does the chancellor think goods arrive on building sites or in shops by some kind of telekinesis?

"The biggest disappointment is that the chancellor failed utterly to do the one single thing which could have made a difference to consumer confidence, to construction output and to the long-term state of the UK housing stock. He could have listened to BMF members - not to mention the Scottish Parliament and the Welsh Assembly - and selectively cut the rate of VAT to 5% on home improvement projects.

"Instead of creating an environment where consumers have an active encouragement to invest in their properties, and professional trades people have a fiscal encouragement to compete with the cash-in-hand wallahs, he has fallen back on the classic old-Labour mindset and thought only in terms of what we used to call 'cash for council houses'.

"A bitter disappointment and a major lost opportunity. One that will haunt both the nation and the construction industry long after he has left office."

Sign Up

For the Builders' Merchants News enewsletter.

In the spotlight

We have vacancies all over the UK for those who work within the Building Supplies sector.