Reactions from the building material industry to Rachel Reeves's first budget have been mixed.

Reacting to the Budget statement, John Newcomb, CEO of the Builder's Merchants Federation, said: “We fully expected this to be a difficult budget for our members,  with many of the revenue raising measures flagged in advance.  

 “The majority of our merchant members are classified as SMEs, with over 70% having an annual turnover below £12.5m. While there was one piece of good news relating to fuel duty, this is far outweighed by  the increases in minimum wage and national insurance contributions.  Our members will be hugely impacted by these extra costs which will immediately come off their bottom line.

 “This is extremely disappointing at a time when we are seeking to increase recruitment and skills in the building materials sector.  Skills which will be essential if we are to fulfil the additional product demand to deliver 1.5 million new homes, which the government has pledged, but provided little detail as to how they plan to achieve this target.

 “As always, the devil is in the detail. We need to get Britain building. The sooner we start seeing details of how the government plans to achieve their housing target, the better.”

 

Professor Noble Francis, Economics Director at the Construction Products Association (CPA), said: “The Chancellor announced a challenging Budget that we believe provides room for cautious optimism.  Whilst prioritising the stabilisation of UK finances and promotion of growth across the economy, there were a number of measures related to supporting the construction and manufacturing sectors and our key asks. Chief amongst those will be the near-term spending increases in affordable house-building; continued spending on repair, maintenance and improvement for a select group of hospitals; a wider commitment to increased capital investment including maintenance programmes for the NHS, schools and transport infrastructure including an almost 50% increase in funding for local roads maintenance; fuel duty relief (our sector is one of the largest users of the road network); an initial £3.4 billion towards heat decarbonisation and household energy efficiency through the Warm Homes Plan over the next three years; incentives for corporate R&D investment and provision for a new Industrial Strategy.

“That said, we also have concerns over the Government’s 10-year infrastructure and new housing strategies, which the industry will have to wait until Spring 2025 at least to learn about. Similarly, the New Hospitals Programme remains under review, although details are expected sooner, in November.  Whilst the significant rises in the National Living Wage will benefit workers, it will increase costs significantly for employers.This is not only due to those on the National Living Wage but also for those on the levels above this who will want to maintain the premium. In addition, the increases in employers’ contributions to National Insurance will also add extra costs for employers at a time when the construction product manufacturing and distribution sectors have been hit hard over the last 18 months. Finally, whilst talking so much about investment, the government has decided not to progress with the road schemes on the strategic road network such as the A5036 Princess Way, A358 Taunton to Southfields, M27 J8 Southampton, the A47 Great Yarmouth Vauxhall Roundabout and A1 Morpeth to Ellingham.

“This Government will soon face a critical juncture, when its plans and ability to deliver its national infrastructure and construction pipeline will hopefully establish its credibility with industry, in marked contrast to its predecessors. Our hope and ambition is that Government appreciates the importance of the UK construction sector as an enabler for growth, productivity and so many of its policy ambitions.”

 

David Young, CEO of Bradfords Building Supplies, and South West Regional Chair of the BMF, has released a short video on LinkedIn to responds to the Budget. For him, the main impact he sees the budget having on his business will be due the rise in minimum wage and the changes to National Inssurance contributions.

 

TDUK Chief Executive David Hopkins said: “We welcome the Chancellor’s announcement in today’s Budget of additional funding for the Affordable Homes Programme, with social housing having largely flatlined over recent years – particularly amidst an ongoing programme of cladding remediation. The additional £500m allocated for the former, and £1bn of funding into the latter, could provide a crucial boost for the sector and help place the government on a pathway to begin to meet their housing targets.

“Equally, announced investment into the UK’s existing housing stock to make them more energy efficient, boost local authority planning capacity, build schools and infrastructure, plant trees, reshape right to buy, and reform the apprenticeship levy, are all welcome steps forward from the new government, and will help define a new era of growth. Each of these initiatives is essential for supporting the UK to overcome the housing and climate crises.

“However, with the government having promised to deliver 370,000 homes per year, the devil will be in the delivery on whether this Budget is enough to realise this ambition. This target requires house building to more than double in less than five years, even as the construction industry faces skills and capacity issues and must rapidly reduce embodied carbon. It is a shame that the Chancellor did not see fit to tie funding for housing to low carbon materials or low carbon outcomes, such as those from timber construction systems.

“If we are to generate systemic change, we need to encourage and recognise investment into offsite manufacturing, skills for the future, and low-carbon construction solutions. The timber industry has been a critical driver for the UK across all three of these areas as a proven business solution which offers quicker build times, higher quality homes, and carbon capture and storage. Beyond this Budget, we must see the government begin to embrace timber in construction.”

 

Tim Balcon, Chief Executive of the Construction Industry Training Board (CITB), said: “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."

 

Dr David Crosthwaite, Chief Economist at Building Cost Information Service (BCIS), said: “Reeves announced £100 billion in capital spending over the next five-years with the mantra “invest, invest, invest” but I’m not convinced this is a budget for growth.

“There are conflicting announcements, and as it stands the investment outlined in the Budget is unlikely to make a material difference to the construction sector and “get Britain building again” - a stated aim of the Government.

“I was hoping for something a little more radical, but perhaps that will come in the Spending Review next spring.

“We really need the Government to invest in fixed capital programmes that will actually “get Britain building again” and drive wider economic growth. Four months in and this feels like a missed opportunity for the new Government.

“The Government did announce spending on construction projects, such as schools, social housing and transport to name a few.

“However, it still remains unclear how the Government intends to meet its self-imposed target of building 1.5 million homes over the life of the Parliament, without tackling the existing skills shortage.

“The resurrection of the HS2 link from Old Oak Common to Euston is a positive move, but we need more commitment to other infrastructure projects in the pipeline with the Lower Thames Crossing project a prime example.”

 

Eddie Tuttle, Director of Policy, Research and Public Affairs at the Chartered Institute of Building (CIOB): “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.” 

 

Aurelie Delannoy, Director of Economic Affairs at the Mineral Products Association (MPA), said: “Significant tax increases for employers are the stand-out measure for the mineral products sector in the near term. Positively, capital spending increases for schools, hospitals and rail projects are welcome, as is the fuel duty freeze to support the delivery of essential materials.

“However, the Budget also raises fresh uncertainty over the timing of the recovery in housebuilding activity. Long-awaited improvements in affordability and demand could be challenged by the inflationary impact of additional Government spending, slower than expected interest rate cuts, and the lowering in stamp duty thresholds, including for first time buyers. It is also disappointing that five major roads projects have been cancelled, reflecting a continuing a trend of poor National Highways programme delivery.”

Robert McIlveen, Senior Director of Communications and Public Affairs at the MPA, added: “Extra funding for roads is always welcome but would be best done on a sustainable, long-term basis rather than on a budget-to-budget basis. Overall, this Budget offers modest gains alongside a considerable tax increase for the sector, which employs over 80,000 people.”

 

Allan Wright, MD at Civils & Lintels, said: “When Labour failed to include construction within its industrial strategy earlier this month, I was not alone in expressing my surprise and frustration that the government’s early focus and commitment had seemingly lost momentum so quickly.

“The irrefutable fact that, in the intervening weeks, Labour has failed to respond meaningfully to the sector’s challenge alongside its further exclusion from today’s Budget speech, appears completely baffling.

“Clarity on the key issues should have come today. Instead, we’re left still asking when much-needed planning reform will be delivered, and when the government will support young people on to the housing ladder.

“These areas could, and should, have all been addressed to provide the tangible detail and confidence that the construction and housebuilding sectors so desperately need in what currently remains a subdued market

“I can only hope that sector’s dissatisfaction won’t go unheard for too much longer and that the government eventually recognises the vital role that construction plays in the buoyancy of UK plc.”

 

Rachel Hughes, Marketing Director at wienerberger UK, said: "The Labour government’s Autumn Budget sets the stage for a shift towards sustainable construction in the UK. Focusing on decarbonisation, it outlines a roadmap addressing environmental concerns and opening new avenues for innovation and growth in construction.

“At wienerberger UK & Ireland, we view these announcements with optimism and support, aligning with our commitment to advancing sustainable construction practices.

“The announcement of additional funding for the Affordable Homes Programme underscores the UK government's dedication to addressing the profound housing crisis. This commitment, part of a broader strategy to invest over £5 billion in housing supply, is poised to deliver up to 33,000 new homes nationwide. Crucially, the initiative targets the creation of 5,000 additional affordable social homes, a vital step towards increasing accessibility to safe and affordable housing for those in need.

“The introduction of a five-year social housing rent settlement further enhances the sector by providing financial stability and promoting long-term planning. The reduction in Right to Buy discounts also aims to preserve existing council housing stock, ensuring its availability for future generations. This multi-faceted approach, which wienerberger supports, reflects a strategic move to rebuild Britain’s housing landscape, fostering community stability and economic growth. With the housing strategy set to expand further in the spring, the focus remains on delivering the largest increase in social and affordable housing seen in a generation, backed by new policy mechanisms and significant financial investments.

“This focus aligns with wienerberger’s  Social Impact Strategy, which centres on the belief that access to stable, high-quality shelter is the foundation for an equitable society. As a business we are taking meaningful action to help prevent homelessness, support those at risk of homelessness, and help those who experience homelessness in getting back on their feet.”

 

Kelly Becker, President of Schneider Electric UK and Ireland, Belgium and Netherlands, commented: "The Government has made good progress to support UK business and manufacturing. Schneider Electric welcomes the commitments to deliver an Industrial Strategy and the Budget's commitments to maintaining funding for the Industrial Energy Transformation Fund, the Public Sector Decarbonisation Scheme, and Made Smarter. We also welcome clarity on the future tax landscape, including a cap on Corporation Tax at 25% for this Parliament and retention of full expensing as well as a commitment to explore extending it to leased assets when fiscal conditions allow. These measures will support manufacturers and wider business to continue to invest in the UK.

 "However, we would have liked to see commitments to supporting the manufacturing supply chain that will play a key role in delivering the industrial and green growth ambitions set by the Government. While we welcome the support for residential and public sector building decarbonisation, the UK also needs a clear roadmap for decarbonising the commercial and industrial sectors. 

"Finally, at a time when UK manufacturers are struggling to hire skilled workers and compete with the EU and the US, we need measures that will support business and economic growth. We question how increasing the cost of employment is aligned with the government’s mission to grow the economy and deliver prosperity."

 

Dave Sanders, Head of Technical Sales at Wrekin Products, commented on the £500 million investments pothole maintenance announced in the Autumn Budget, saying : "Unless there is a real push for long term pothole repair solutions instead of quick fixes, then we will not be able to solve the pothole crisis – no matter how much budget is allocated. We’re seeing a growing number of local authorities unhappy with the approach of patch repairing already subpar pothole repair works, but this is happening far too often. 

“More guidance surrounding how potholes are formed and the innovative solutions available will allow more local authorities to address the root causes properly.  

“Other underlying causes of potholes include road ironwork failures and this needs to be addressed. Potholes will form when weaknesses exist in the road surface, potentially from surfacing joints, remedial works, or the use of poor-quality materials. Fitting a piece of ironwork in a road can create a potential weakness, as well as the cuts in the road needed to remove ironwork. Replacement or repair of ironwork also poses an increased risk.? 

“Selecting robust systems with the correct, appropriate materials can reduce the potential for surface weakness. Durable ironwork that is sympathetic to its bedding materials and surrounding environment is key to preventing potholes. 

“Though there is much to be done in addressing the short comings of iron work solutions in the road network, a key factor will be the welcomed £500m commitment from national government. More discussions and collaboration between national government and local authorities will be needed to ensure that the allocation of funding accurately addresses the root causes of failures in the road network, and we look forward to these developments taking place.” 


This page will be updated as further reactions are published.