The Construction Plant-hire Association (CPA) has called for a two-year extension to the cut in fuel duty and a relaunched rebate for hydrogenated vegetable oil (HVO) ahead of the Spring Budget on Wednesday (6 March).
The trade body said the government should introduce the measures to “maintain and grow” the construction plant-hire sector as it deals with widespread economic uncertainty.
In a letter addressed to chancellor of the exchequer Jeremy Hunt, CPA policy manager Chris Cassley said the plant-hire sector had “demonstrate[d] its professionalism and resilience” in delivering for the construction industry, despite wider economic uncertainty and the decision to cancel large parts of HS2 last year.
A two-year extension to the cut in fuel duty, which is set to end in March, would help to offset volatility across the sector and provide certainty to the sector, Cassley argued in the letter.
While he acknowledged that prices had fallen since December, he warned that conflict in the Middle East and Red Sea could “undermine those falls”.
Cassley also called for the tax rebate on HVO to be reintroduced for at least two years, to offset fuel price rises and help move businesses away from diesel. The government cut the rebate back in 2022.
The CPA also called on the government to extend the full expensing allowance to the whole plant-hire sector. The expensing allowance, which was made permanent in last year’s Autumn Statement, allows companies to claim capital allowance on plant and machinery investment.
But that should cover all companies that hire construction equipment, regardless of whether the equipment is provided with an operator, Cassley argued.
“Extending the full expensing allowance to our members has the potential to boost sales of UK-manufactured construction equipment, improve levels of plant-hire business investment, and help offset the decline in the machinery and equipment sector, which has seen a 21 per cent decrease in jobs since 2011,” he said.
CPA president Brian Jones said the Spring Budget “provides the ideal opportunity” for the chancellor to work with the industry.
“Since the Autumn Statement in November last year, the wider backdrop of continued economic uncertainty, and the cancellation of large infrastructure projects such as phase 2 of HS2, CPA members have continued to demonstrate their professionalism and resilience in delivering for the wider construction industry,” he added.
“The plant-hire industry continues to work for its clients, adding value and building the houses, workplaces, schools, hospitals and infrastructure of a modern, dynamic economy.”
