The Chancellor, Rishi Sunak, is under great pressure ahead of the Spring Statement to address the cost of living crisis and a barrage of rising energy, fuel and food bills.
Not only this, but he will be expected to echo initiatives introduced in the Autumn Budget and report on progress, particularly on the green agenda.
Re-affirming the green agenda
The Spring Statement provides the Chancellor with the opportunity to reiterate the Government’s climate goals and what exactly it is doing to progress the green agenda.
For the mortgage industry, I would like to see the Chancellor announce new green incentives for borrowers to increase the energy efficiency of homes across the UK.
While the Green Homes Grant was a well-intentioned breakthrough for the green mortgage market, it was short-lived.
The Government needs to provide a more long-term solution to boost the number of borrowers undertaking energy retrofits and help to meet the UK’s net zero target by 2050.
As a nation, we still rely on imported oil and gas, but the introduction of subsidies for improving energy efficiency and making green home improvements could be a significant step in the right direction to independence from fossil fuels.
With minimum EPC ratings for rented properties shifting from E to C under new regulation, the Government also needs to introduce more incentives for landlords to improve the energy ratings of their properties.
This could reduce both the likelihood of landlords passing costs to tenants and the living costs of those in rented accommodation.
Implementing tax exemptions for homeowners and landlords can help to motivate them to make green improvements to their properties.
For example, a reform of Stamp Duty linking to sustainable home upgrades could see new homeowners making these changes in the first few years of ownership, and receiving back a portion of the Stamp Duty tax. Or similarly, offering VAT exemptions for making sustainable upgrades could also incentivise landlords and homeowners to make these improvements.
To further promote the green agenda and offset the National Insurance increase and rising energy costs, Rishi Sunak should also endeavour to fulfil the Conservative manifesto promises relating to the Home Upgrade Grant (£1.4bn) and the Social Housing Decarbonisation fund (£200 million). A temporary fuel duty break could be one way of addressing the cost of living squeeze.
Making housing affordable
Whilst the Government reiterated their commitment to delivering up to 180,000 affordable homes in the Autumn Budget, the property market is not seeing the effects of this as there is a continued shortage of housing where people want to live.
I would like Wednesday’s statement to include an update on how the £11.5bn Affordable Homes Programme (2021-26) is developing and greater emphasis on urban regeneration and social housing. For example, converting unused office buildings into homes could help to rejuvenate town and city centres.
For downsizers looking to free up larger properties, the Government could also introduce a Stamp Duty relief similar to that offered to first time buyers.
This would help to free up more properties for growing families to move up the ladder, and thereby provide more choice of first homes for those looking to step into homeownership.
What will Rishi Sunak announce on Wednesday?
Despite my hopes, it seems unlikely that the Chancellor will announce any drastic changes on Wednesday and we will probably have to wait till the Autumn Budget for anything substantial.
Our best case prediction is that Rishi Sunak uses this opportunity to re-iterate a firm commitment to the green agenda.
There has been some debate in the news agenda as to whether the Chancellor will progress with the National Insurance hike.
However, I think it is unlikely the Government would U-turn on this entirely, and so I expect the rise to be confirmed.
Jonathan Stinton is the head of intermediary relationships at Coventry for intermediaries
