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...news... autumn budget reactions
Midlands construction leaders say Budget is ‘sticking plaster’
Construction and housebuilding companies across the Midlands have warned the Chancellor had failed to address the key issues which would deliver lasting support for the sector. Although the Chancellor announced planning
reforms, including £48 million to recruit 350 extra planners in England and additional infrastructure growth funds for the Midlands, businesses say the Budget still fell “short of the mark”. Award-winning civil engineering and
Sophie Horgan
construction contractor McPhillips directly employs 240 people and has delivered more than 140 projects as principal contractor with a value of £300million in the last five years including
Birmingham city centre public realm schemes. Director Stuart MacKenzie warned confidence across the sector had been
knocked by speculation ahead of the announcement: “We understand the tough decisions to protect the NHS and curb the government’s debts and we’re encouraged she made reference to speeding up the planning system but what we really need now is action. If we want to see growth in the economy and deliver on projects that will benefit and boost our communities then we need action that translates into a visible pipeline of work.” Sophie Horgan, director of Bromsgrove-based Horgan Homes said: “I’m afraid
any confidence in this Budget and this chancellor was fatally undermined when Rachel Reeves performed her screeching U-turn over tax rises.” “It was clear evidence that this is a Chancellor who puts political expediency ahead of economic integrity. As a result, the Budget is a sticking plaster of a statement. I wanted to see clear action to prioritise the small housing sites and SME constructors who are the backbone of housebuilding in this country.”
STA disappointed that housing targets not covered in Budget announcement
The Structural Timber Association (STA) is disappointed to see that the Labour party’s previous commitment to building 1.5m new homes was not a focus in the budget announcement made by Chancellor of the Exchequer, Rachel Reeves. The UK Government is already far behind on its commitments, building just 208,600 homes in the 2024/25 financial year, which was a 6% decrease on the previous year. While it has been stated that the Government would not target annual interim targets,
there will need to be a significant increase in the following years. The increased use of structural timber is an effective means of achieving the commitments safely and effectively, with its speed of build and offsite benefits unrivalled by any other building material. Andrew Orris, CEO of the STA, said:
“The housebuilding industry has bolstered its structural timber capacity, building on an already well-positioned industry, however, the Government must drive the increased use of homes built with structural timber if its target of 1.5m homes by 2029 is to be achieved. As an association and an industry, we believe this should have been a stronger focus within the budget announcement. My question to the government is how do you plan to achieve this?”
Budget keeps builders
stuck in the mud Chancellor of the Exchequer, Rachel Reeves delivered her second budget at the end of last month, unveiling an array of tax measures. Most importantly, she did not go ahead with the unviable landfill tax increase of 3,015%, instead implementing a smaller uplift. Ultimately, the biggest cost of the Budget was the increased cost to hiring, especially for firms hiring young people. Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said: “Construction feared the worst from the budget, particularly on landfill tax. While we were heard on this proposal, lower rate landfill tax, or ‘muckaway’, will still more than double in price. Furthermore, businesses who employ directly, take on apprentices, or who choose to decarbonise their vehicle fleets, will be throwing their arms up in frustration. “There was nothing on stamp duty land tax rebates for the most efficient homes, no cancelling of the Building Safety Levy and not a murmur on Help to Buy, all of which means industry will remain in the mud. “Death by a thousand taxes has
already killed off many businesses, with insolvency rates still high within the construction industry. The Government must therefore redouble its effort to make projects more certain for investors, while helping the construction businesses who deliver them become more viable. Planning reform is one place which will help industry, and we can only assume that as they were omitted from the budget, they have been saved for the housing secretary, Steve Reed.” Rico Wojtulewicz, Head of Policy and Market Insight and the NFB, said: “The landfill tax proposal was an existential threat to the construction industry, dampening investment and growth. We are therefore delighted that the Government engaged so openly and diligently with industry to scrap their proposals. It was a real partnership. The lower rate landfill tax will double
for 2026-27 financial year, which will be a challenge, but we hope the next steps are for the Government to work with industry on analysing waste licensing and regulations.”
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