On Wednesday 6th March, the Chancellor, Jeremy Hunt, delivered his Spring Budget. As always, the rumours swirl in the run up to the announcements. This year, there was little left to the imagination and much of what was predicted was announced. Yet, it was still interesting to see the approach the Chancellor would take given it is an election year.
Our Chief Executive Officer, Kevin Wellman, gives his take on the announcements that will have some of the biggest impacts on the industry and our customers.
National Insurance cuts
The Chancellor stated that the tax system should be fair, simple, and reward hard work. He stated that through the current system, if you are of working age and get your income from having a job, you pay both National Insurance contributions (NICs) and income tax. But if you get your income from other sources, you only pay income tax.
Therefore, he made the decision to cut the main rate of employee National Insurance by 2p from 10% to 8% from 6 April 2024. The government is also cutting a further 2p from the main rate of self-employed National Insurance on top of the 1p cut announced at Autumn Statement 2023.
Kevin stated: “Many will be pleased to hear the Government’s announcement of a cut to National Insurance today. However, these cuts do not go far enough.
“The rising cost of fuel and materials has created the perfect storm for many plumbers and installers, in particular sole traders who have struggled to successfully pass on rising costs due to customers struggling themselves, and even disputing payment. In the heating and plumbing industry, installers have no choice but to make hefty upfront payments for products, such as boilers, meaning they are constantly being left out of pocket.
“This has had a major impact on cash flow, affecting profits and take-home pay. While there are services that can support plumbers in requesting the money they are owed, this can be a timely and costly matter.
“The Government talks of a positive ‘Payment Culture’ but it needs to put its money where its mouth and ensure that consumers can have the work done that they need without plumbing and heating professionals footing the bill.”
Extending the Fuel duty freeze
The government is also extending the temporary 5p fuel duty cut and cancelling the planned inflation-linked increase for 2024-25, which was initially introduced by then Chancellor Rishi Sunak in 2022.
Kevin explained: “Consumers across the globe have felt the hit of rising energy costs. The freeze on fuel duty has given some peace of mind and knowing that it won’t be lifted just yet will remove some of the worry people have felt.
“But ultimately, the cost of living is remaining high and the government must do more to help those in need. If you are having issues paying energy bills, talk to your supplier straight away as help schemes are available.
“There are also a number of actions people can take to try to protect themselves and reduce their energy consumption. Speak to your plumbing or heating installer about this as they can ensure your boiler is maintained and running optimally, and recommend devices such as heating controls and smart meters so that energy is never being wasted.
“To find a trusted plumber, you can use the tool on our website to contact a local tradesperson that is verified by the Code of Professional Standards.”
Introducing a Public Sector Productivity Programme
The government also announced that it is reforming how it delivers key public services and boosting public sector productivity to ensure that every pound of taxpayers’ money is well spent.
The Chancellor stated that productivity within the sector was still to get back to pre-pandemic levels and by putting a focus on increasing efficiencies, for example through digital and technological transformation, up to £20 billion of benefits a year would be delivered.
The government will be announcing a Public Sector Productivity Programme. For the NHS, this will be backed by £3.4 billion of funding which it said will help unlock £35 billion in cumulative productivity savings from 2025-26 to 2029-30. The government will also be investing £800 million in wider public services which will deliver up to £1.8 billion worth of benefits over the forecast period.
Kevin responded: “Councils across England have warned of going bust over the past few months. So more financial support cannot come soon enough.
“A lack of budget has resulted in many councils facing tough decisions over their priorities, often at the expense of public necessities such as toilets.
“Public toilets should not be a luxury. They are a necessity. A lack of loos has had huge and often discriminatory impacts on women, the elderly, disabled and those with health issues such as Crohn’s Disease or Irritable Bowel Syndrome.
“Easy access to safe, hygienic, well-equipped toilets is a basic human right. This is why we set up the ‘Love your local lav’ campaign to raise awareness of the importance of public lavatories.
“We need the Government to get behind initiatives like this and ensure that councils have adequate funding so the public has the resources to enjoy the spaces our cities, towns, and villages offer.”
Overall, the feeling was that while the government has made changes that will help both plumbing and heating professionals and consumers, many are feeling the impacts of the cost of living crisis and more needs to be done to support people.
There are resources that can help you. For example, you can join us in our fight to save public loos, here: https://www.ciphe.org.uk/campaigns/love-your-local-lav/
If you’re a plumber who needs help navigating these challenging times, find out the ways we can support you via our membership, here: https://www.ciphe.org.uk/professional/become-a-member/
We also have lots of helpful resources on our blog for consumers with money-saving tips. Or you can use our database to find a trustworthy plumber who can help fix any plumbing problems you run into or help you find ways to ensure your home is running efficiently, helping you to save money in the long term, see here: https://www.ciphe.org.uk/public/find-a-plumber-or-heating-engineer/