Chancellor Rachel Reeves has announced a 1.2% rise in employer national insurance contributions, stirring reactions from industry leaders.
- Leo Quinn, CEO of Balfour Beatty, cautiously welcomes the Budget’s commitment to infrastructure investment, noting its potential for economic growth.
- Concerns arise as other industry executives warn of challenges posed by increased national insurance contributions.
- Focus is on the need for government to balance tax hikes with planning reforms crucial for the construction sector.
- The Budget’s measures draw mixed responses regarding recruitment and achieving government housing targets.
Chancellor Rachel Reeves has introduced a 1.2 percentage point increase in employer national insurance contributions. This move, announced on 30 October, has sparked significant attention and varying reactions within the construction sector. The government’s decision aims at bolstering its financial resources for public projects, but has also led to concerns about the financial burden on businesses.
Leo Quinn, the CEO of Balfour Beatty, expressed a cautious optimism regarding the Budget. Highlighting the government’s commitment to infrastructure investment, he sees it as a foundational element for future economic progress. Quinn acknowledged the inherent challenges that come with the increase in national insurance contributions, affecting all sectors including construction. He emphasised the importance of balancing these increases with the certainty that comprehensive planning reforms could provide, which are essential for the efficient delivery of important infrastructure projects.
In contrast, other industry leaders have expressed concerns. Richard Beresford, CEO of the National Federation of Builders, remarked on the risks to the government’s housing targets due to the increased national insurance. He noted that the sector’s ability to hire and train new employees might be compromised, hindering the next generation of skilled workers. He also pointed out that while reforms are seen as potential solutions, their implementation remains distant and gradual.
Similarly, John Newcomb from the Builders Merchants Federation highlighted the immediate financial impact on member businesses, affecting their profitability. He lamented the Budget’s timing, as the industry strives to recruit and develop skills necessary for meeting the pledge of building 1.5 million new homes. The absence of detailed plans to achieve this target only adds to the sector’s challenges.
Richard Steer, chairman of Gleeds, offered a critical perspective, suggesting that the national insurance increase might discourage recruitment in an already strained industry. With an urgent need to employ thousands more workers by 2028, he found little in the Budget to suggest a serious approach to addressing training, retention, planning reforms, and environmental goals.
The Budget’s impact on the construction sector highlights a complex interplay between fiscal policy and industry needs, eliciting a range of responses from leaders.
