Updating the House of Commons yesterday, the chancellor of the exchequer recognised the financial difficulties caused by the war in Iran and measures being taken to mitigate them
While all sectors of UK construction and infrastructure could benefit from the discussed measures, energy is a particular concern at the moment.
The war in Iran has been causing a lot of concern, and many feel has been keeping an already-struggling industry down.
Energy is a major concern as oil supplies run low
As energy costs continue to rise, the chancellor has announced increased support for energy-intensive companies through the British Industry Competitiveness Scheme, which will be important for the UK construction and infrastructure supply chain, as it provides support for the manufacturing of steel, cement, ceramics, chemicals, glass, and heavy manufacturing.
The ceramics sector is also receiving a £120m boost to “increase efficiency and drive-down energy costs,” thereby supporting the supply of bricks, tiles, cladding, and other products, such as toilets and sinks for new homes.
Further support for the supply chain came in the form of relief for transport, including an HGV road tax holiday (saving heavy lorries up to £912), a red diesel duty cut of over a third for rail freight, and the fuel duty freeze. This will theoretically soften the impact of costs for logistics, material transport, site delivery pricing, and heavy plant operations. Tackling fuel costs will also help smaller tradespeople who need to drive their own vehicles for work.
Measures such as the Electricity Generator Levy are also being implemented to “weaken the link between high gas prices and electricity prices.”
“We stand ready”
During the speech, the chancellor said: “We stand ready to act if market conditions worsen significantly later this year, and I have been leading cross-government contingency work on design of potential future targeted and temporary support.
“For businesses, any support will also need to be carefully targeted at firms most exposed to the crisis.
“But while many firms have been insulated from recent prices rises through fixed price contracts, there are sectors that face particular structural issues related to energy costs. ”
She continued: “[…] We must also build resilience in our critical infrastructure and industrial strategy sectors where supply chains are critical for growth and security.”
Two offshore wind farm projects have been announced by DESNZ in the North Falls and Dogger Bank South wind farms as an example of pursuing the UK’s energy independence and net zero targets.
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