Chancellor of the Exchequer Rachel Reeves yesterday (30 October) delivered Labour’s first budget in 14 years.
Reeves said the government will raise taxes by £40bn, including an increase in national insurance contributions for employers from April – news that has not landed well in the construction industry.
However, she also announced a £5bn investment in house building and confirmed funding to extend HS2 to London Euston station, which has been welcomed in the sector.
Here’s a roundup of reactions from construction leadership to the chancellor’s autumn budget.
CIOB director of policy, research and public affairs Eddie Tuttle
“Today’s budget offers mixed news for the construction sector. Increased funding for new infrastructure is welcome, as is the continued emphasis put on housing, but higher taxes, like increased employers’ national insurance contributions, are likely to increase financial strains on the SMEs that are so vital to the industry and its supply chain.
“Increased tax rises without consistent monitoring of the impact they have on the health of crucial sectors, such as construction, run the risk of damaging the pivotal role SMEs play. We urge ongoing government consultation with bodies like CIOB to monitor these impacts on the sector.
“We welcome the government’s plans to introduce the Warm Homes Plan and we hope policymakers will consult with the construction industry on how the grant funding will be targeted, to avoid repeating previous mistakes in other upgrade schemes.
“Finally, building safety remains a critical concern for the construction industry, so we were pleased funding for dangerous cladding remediation was acknowledged as part of the budget, particularly in the wake of the second phase of the report into the tragedy at Grenfell Tower.”
Gleeds’ chair Richard Steele
“This was a budget designed to put election rhetoric into economic strategy and having had more leaks than the Manchester United defence, there were few surprises.
“Our sector is one of the largest employers, and hikes in national insurance and increases in Labour costs are going to dampen the appetite for recruitment in an industry that already needs to employ just under 251,500 workers by 2028 to just stand still.
“The budget did little to persuade me that they treat our challenges on training, retention, planning reform and meeting net zero targets with any more seriousness than the last government.”
Viki Bell, director of operations at the Construction Equipment Association
“The government’s renewed commitment to rail, road, and infrastructure development is a promising step for the construction equipment sector.
“The investment in 11 green hydrogen projects is another positive step, supporting the transition to cleaner energy and encouraging sectors like ours to consider alternative fuels. Despite these positive moves, it’s disappointing to see limited direct financial relief for construction firms.
“Doubling the employment allowance to £10,500 helps smaller construction equipment firms by reducing national insurance liabilities, however, the planned increase in employers’ national insurance from 13.8% to 15% in April 2025, coupled with the reduced secondary threshold from £9,100 to £5,000, is a double blow for firms.
“These added costs are likely to strain budgets and limit opportunities for new hires or expansion, putting significant pressure on SMEs and OEMs at a time when stability and investment are critical. While we welcome the forward-looking approach, more targeted support is essential to help our sector fully contribute to these ambitious goals.”
CITB chief executive Tim Balcon
“The government’s continued support for the construction industry through increased investment in the Affordable Homes Programme and the commitment to infrastructure delivery is welcome.
“A strong pipeline of apprentices and construction workers is required to build the millions of homes we need, and key to achieving the government’s ambitions is to get the right skills policies in place. It is essential that the new Growth and Skills Levy drive up construction apprenticeship numbers that have declined under the Apprenticeship Levy. Last year CITB helped over 29,000 apprentices during their courses.
“However, apprenticeships aren’t the only route into a career in construction, and we need to ensure we’re making all the available pathways into the industry clear and accessible for people, including upskilling and identifying transferable skills from other industries.”
Alex Vaughan, CEO at Costain, on the government’s commitment to HS2 Euston tunnelling funding
“This is positive news that gives certainty and clarity for the UK’s largest and most complex infrastructure programme.
“Shaping, creating and delivering complex, transformative infrastructure demands effective planning, clear decision-making, and collaboration between the industry, government and regulators.
“The UK needs to reset its relationship with infrastructure by committing to a 10- or 20-year plan overseen by a dedicated minister for infrastructure. This will enable essential infrastructure to be delivered more productively, whilst providing consistency and continuity of demand for investors and the supply chain.”