The budget centred around childcare and pensions with the Chancellor focusing on increasing the workforce and encouraging investment. With a view to reducing carbon emissions, the budget included a commitment to invest £20bn over the next two decades on low-carbon energy projects, with a focus on carbon capture and storage.

The main rate of corporation tax, paid by businesses on taxable profits over £250,000 will increase from 19% to 25%, with companies that earn profits between £50,000 and £250,000 to pay between 19% and 25%. However, companies that invest in new machinery and technology will be able to lower their taxable profits.

Energy

As a part of the budget’s focus on energy, the government launched a consultation into extending the Climate Change Agreement by two years, taking to the end of 2027, which would provide further reductions in the Climate Change Levy for participants.

Cold Chain Federation chief executive Shane Brennan said: “The cold storage Climate Change Agreement has been very successful in incentivising businesses in our industry to invest in energy efficiency, and the result has been a decade of significant energy efficiency progress in cold stores as well as important tax savings for the industry. Many operators now need to advance to more complex measures to make further energy efficiency improvements, while at the same time they are dealing with the cost impact of the energy crisis. The continuation of a successful Climate Change Agreement scheme is vital in supporting the investment needed to maintain momentum towards a net zero cold chain despite the challenging economic environment.”

However, there was disappointment that more wasn’t included in the budget to encourage the uptake of heat pumps. Henk van Den Berg, strategic business manager, heating and renewables at Daikin UK said: “If heat pumps are to become mainstream and support the UK’s net zero ambition, more needs to be done to prevent us from falling behind other countries in the global green race. While financial support from the government is still in place, the benefits of heat pumps versus fossil fuel systems need to be properly communicated to encourage better uptake of the Boiler Upgrade Scheme, bringing forward a ban on installing gas boilers in new homes, and clearer training support for installers.”

Russell Dean, Mitsubishi Electric residential product group director said: “As many businesses plan to remove gas from their buildings over the next few years, and heat pumps are recognised as the future of both commercial and home heating in Britain, it is also vital the government supports wider adoption of the technology. To encourage this, we would have liked to have seen a commitment to roll over unspent money from the Boiler Upgrade Scheme for families to insulate their homes and install the technology.

“As part of this, the government must also incentivise the training of more installers to fit heat pumps. Without this, the current target of installing 600,000 heat pumps per year by 2028 is in jeopardy.”

Fuel

The supply chain is heavily reliant on logistics, and the associated costs, so businesses will be relieved to see remains unchanged and that the temporary 5p cut to fuel duty on petrol and diesel, due to end in April, has been kept for another year.

However, pump prices are still an issue and Paul Holland, managing director of UK Fleet, Allstar said: “The price at the pump still needs to come down. The price of a barrel of oil is roughly where it was last year, but retail margins are higher. The trajectory has to be downwards, and we can expect a drop of 10-15p in the near future, should oil prices remain at current levels. If and when this comes into play, it will be another benefit for fleets during the current tough economic conditions.”

Electric vehicles (EVs) are slowly becoming the norm, held back only by the lack of sufficient infrastructure. Mr Holland commented: “I feel there was a missed opportunity in the relative lack of mention in the budget on electric vehicles (EVs). EVs can cost significantly less to fuel than even the least expensive fossil fuel vehicle, so encouraging more fleets to adopt them would save businesses, as a whole, far more money.”

Labour

Child care subsidies enabling parents to go back to work, and incentives for older workers could increase the labour force.

Thirty hours of free childcare for working parents in England expanded to cover one and two-year-olds, although there is a delay due to insufficient child care facilities, which means that roll out in stages will start from April 2024.

Abolishing the cap on the amount workers can accumulate in pensions savings over their lifetime before having to pay extra tax, is aimed at encouraging older workers to remain in employment for longer and 63m has been put aside for programmes to encourage retirees over 50 back to work, ‘returnships’ and skills boot camps.

Helen Yeulet of the Building Engineering Services Association (BESA) said: “The Chancellor’s support for returnships could unlock a new source of skills provided by older workers and encourage those coming closer to retirement age to remain in the sector and refresh their skills through apprenticeships.

“This focus on unlocking the potential in the older generation is an important part of the wider challenge to increase diversity across our sector. Returnships and apprenticeships can help to replenish the thinning ranks of senior engineers with valuable experience and provide the workforce with valuable new skills.”