MPA Responds to the Spring Budget
The Mineral Products Association (MPA) has welcomed measures announced in the Government's Spring Budget on 8th March, including the freeze on the Aggregates Levy indexation for 2017-2018 and proposals for a new set of controls on energy policy costs to replace the Levy Control Framework, alongside other plans to encourage investment, promote trade, and secure the availability of skills.
Confirmation that the Aggregates Levy will be frozen at a rate of £2.00 per tonne for 2017/18 is particularly welcome, helping to maintain stability and momentum in markets which are currently largely positive.
The announcement to target a total carbon price increases the uncertainty around climate change legislation, but is interesting if it signals the demise of the deeply unpopular, costly and environmentally ineffective Carbon Price Support tax. The MPA is keen to see the detail to ensure that the competitiveness of energy intensive mineral production, such as cement and lime, is protected.
Additional funding of £1.3 billion for roads and local transport schemes, including £690 million for new local transport projects, £220 million to improve congestion points on national roads and £90 million going to the North and £23 million to the Midlands through the National Productivity Investment Fund (NPIF), as initially announced in the Autumn Statement, is also good news. However, given that asphalt sales for 2016 indicate that previous positive investment plans for the national road network have only produced a limited pipeline of work, the MPA hopes to see greater and faster delivery on the ground in coming months.
MPA data indicates that to date, regional recovery from the 2008/9 recession has been skewed very strongly towards London, so it is hoped that further commitment to the Midlands Engine Strategy, continued work on the Northern Powerhouse and a new approach to funding infrastructure to encourage growth across the UK, will help to even out existing regional disparities and boost growth beyond London.
Commenting, Nigel Jackson, Chief Executive of the Mineral Products Association, said:
"The MPA welcomes the freeze to the Aggregates Levy which will help maintain momentum for the industry. The prospect of a possible end to Carbon Price Support is also encouraging, although we await further detail. Investment in our road network is long overdue, and the Government should ensure that its planned timescales do not slip and ideally accelerate delivery on their commitments. As this Spring Budget focussed on improving skills, in order to boost productivity and living standards over the long term, the MPA hopes that further infrastructure commitments will be made in the Autumn Budget."
On average, 3% of the Mineral Products industry's workforce come from the EU, increasing to 9% for activities directly related to freight transport by road. Having urged the Government to enable the UK to balance access to EU markets with sufficient movement of labour to fill skills gaps, it is encouraging that the Government has emphasised the need to create a highly-skilled workforce to ensure businesses have the skills needed to succeed in global markets. However, key and basic skills are also critical, and new thinking will be required to ensure we achieve the right balance. It is hoped that the newly announced t-levels will be available for young people who wish to work in the minerals and mineral products, construction and manufacturing sectors, as suggested in the Government's Post-16 Skills Plan and independent report on technical education.