Budget pledge to maintain capital spend welcomed by landscape suppliers

Businesses supplying the commercial landscaping sector have universally welcomed a pledge from the coalition government in Tuesday's emergency budget to rule out further cuts to capital spending.

Referring to an "error" made by John Major's government in the early 1990s, which he said cut capital spending too much, chancellor George Osborne promised there would be no further reductions in capital spending totals, but added that projects with a "significant economic return to the country" would be prioritised in the autumn departmental spending review.

Welcoming the news, James Coles Nurseries managing director James Coles said: "This means that projects in the pipe-line, such as hospitals, will continue and they will need trees and shrubs from businesses such as ours."

HTA Amenity Suppliers Group chair and Boningale Nurseries chairman Tim Edwards, who also welcomed the news, said over the past year amenity had "done better than expected" thanks in part to the Building Schools for the Future (BSF) programme. "I take Osborne's pledge to mean that monies already allocated to projects will still be spent. The projects we're hoping to get in during the coming 12 months all started 12 months ago."

The BSF programme will be reviewed this autumn when Edwards said he expected new criteria to be introduced for future projects.

Wholesale nursery Johnson of Whixley managing director Andrew Richardson echoed these views saying capital expenditure cuts "had been of great concern". Some 80 per cent of Johnsons amenity sales last year came from work funded by the government.

Commercial growers also welcomed a number of measures in the budget designed to encourage private sector growth including cuts to corporation tax and measures to aid small business in the regions.

Coles said: "My impression is that they are trying to help business get back on its feet. Sitting here in the East Midlands, it is nice to see an attempt to get something going further north."

However, concerns remain over access to finance. Edwards said: "If we are going to have a slow recovery, businesses are going to need to have access to working capital - as the economy improves, businesses need access to cash."

OTHER MEASURES

- Additional current expenditure reductions of £30bn a year by 2014-15

- Two-year public sector pay freeze on staff earning more than £21,000

- Corporation tax to fall by 1p in the pound a year for four years until it reaches 24 per cent

- Small companies' tax to fall to 20 per cent

- New firms outside South East to be let off employer National Insurance contributions, up to £5,000, for each of first 10 employees recruited

- Regional Growth Fund to provide finance for regional capital projects over next two years

- Capital allowances for majority of plant and machinery assets to fall from 20 to 18 per cent

- Annual Investment Allowance to fall to £25,000 a year

- Reversal of Government decision to increase duties on cider by 10 per cent above inflation confirmed.


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