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25 January 2017

MPA Presses the Government to Make Brexit Work and Implement Investment Plans Faster

Ahead of the Spring Budget on 8th March, the Mineral Products Association (MPA) has pressed the Government to make Brexit work, implement investment plans and accelerate the progress of roads, transport and housing projects.

In the light of the Prime Minister’s recent speeches outlining the Government’s negotiating objectives for exiting the EU the MPA’s main Brexit priorities relate to investment, trade and skills to build confidence to encourage investment. Although we will be leaving the single market, we need to maximise and balance free trade with the EU with proportionate and sufficient free movement of labour to fill our skills gaps. There remains an urgent need to confirm rights of UK residence for essential EU workers as a matter of urgency to enable and support economic and construction growth.

Making representations to HM Treasury, the MPA have pressed the Government for early project delivery, as evidence indicates that additional funding of £1.3 billion for transport and housing, as outlined in the Government’s 2016 Autumn Statement, is largely backloaded to the end of this Parliament.

Sales volumes of asphalt, the principal material associated with road construction and maintenance, declined by 2% in England in 2016, and the MPA is currently forecasting a similar decline in 2017. Using this data as an indicator of actual roads activity, it is evident that in spite of very positive investment plans, particularly for national roads, there is a relatively limited pipeline of work for delivery over the next 12 to 18 months. The opportunity exists to bring forward some of the longer term spending plans.

Whilst the increased funding announced by the Government in the Autumn Statement last year is welcome, the latest National Infrastructure and Construction Pipeline identifies total infrastructure project spending rising to £66.1billion in 2017/18 but then declining for three years to £52.7 billion in 2020. It remains possible that infrastructure investment will be falling towards the end of this Parliament.

The MPA has welcomed the Government’s commitment to accelerate housing activity, including the introduction of a new Housing Infrastructure Fund. However, the Government should focus on the consistent delivery of a higher supply of new housing, particularly affordable homes, with Government maintaining neutrality over the method of construction.

Government should also take urgent action to maintain the competitiveness of energy intensive industries such as cement and lime in the UK. Current policy development in Europe and the UK has the potential to increase the operating costs of UK businesses significantly therefore reducing their international competitiveness.

Further points raised in the representation to HM Treasury include:

  • Freezing the Aggregates Levy rate and extending the scope of the Levy to include the aggregates content of imported aggregates products such as precast concrete.
  • Addressing the startling disparities in regional construction and development which the emerging Industrial Strategy should address.
  • Progressing and implementing the Cutting Red Tape (CRT) review of planning and regulation relating to mineral extraction.

Commenting, Nigel Jackson, Chief Executive of the MPA, said:

“This year’s Budget is an opportunity to build on what proved to be a reasonable 2016 for our sector. Clearly there are many added uncertainties in play which can cause investors to hesitate so Government must aim to create a positive mood which encourages development of essential sectors such as mineral products and supports the growth of new businesses. In spite of the efforts made by Government to understand the manufacturing side of the economy there remains a worrying lack of awareness about the vital role mineral products plays in underpinning construction and manufacturing and this is reflected in this week’s Green Paper on Industrial Strategy. Foundation industries based on primary production such as mineral products will continue to play a critical role in our industrial future being the largest material flow in the economy and we would welcome Government recognition of this.”

Ends.

   
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