How will the budget affect the construction industry?
November 27, 2024
Rachael Reeves revealed the first labour budget for fourteen years at the end of October. With a mix of increased investment and tax rises, there were both positives and negatives for Molson customers across the construction industry. Inevitably, this has drawn a mixed reaction, with descriptions of the budget ranging from ‘positive news’ and ‘encouraging’, to ‘devastating’ and ‘nothing but hot air for the construction industry’.
What were the main budget announcements?
A number of measures were announced in the budget, with significant infrastructure and housing investments, along with tax changes that will help to pay for them. The key construction industry measures included:
- Commitment to rail improvements to the Trans-Pennine route
- Renewed commitment to taking HS2 into London Euston
- Around £5bn for affordable housing projects
- A further £3.4bn for warm homes upgrades
- £300m extra for schools maintenance including RAAC remediation
To cover the costs of these investments, the Chancellor also announced rises in Employers’ National Insurance, lifting the rate from 13.8% on earnings over £9,100 to 15% on earnings over £5,000. The budget also announced a 6.7% rise in the minimum wage for over 21s.
How has the industry reacted?
On balance, there has been a reaction of cautious optimism from the construction industry, with many in the sector welcoming the new investment, while at the same time expressing concern as to the impact of increased employment costs on SME construction companies.
The Chartered Institute of Building policy director, Eddie Tuttle, could see both sides: “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,” he said. “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.”
President of the Royal Institute of Chartered Surveyors, Tina Paillet, said the budget was ‘positive news’ arguing that the tax changes, while hard for some companies, would help secure badly needed infrastructure.
The increase in the minimum wage, combined with an extra £2.5bn for skills training was particularly welcomed by many in the sector. The industry is facing an historic skills shortage of around a quarter of a million workers. However, the impact of the minimum wage rise on struggling SMEs was also a concern for many commentators.
Molson are here to help
Whatever your take on the 2024 Budget, it’s good to know that Molson are here to help you with a wide range of construction equipment for sale, backed by affordable finance to help you balance your own budgets.
“Molson are perfectly placed to support the growth of the sector,” explained Molson construction director, John Beard. “We have construction equipment for sale to meet the needs of projects on all scales, from small, local residential developments, aimed at meeting ambitious affordable housing targets, to large infrastructure projects such as HS2 and the upgrades to the Trans-Pennine route.
“While we’re delighted to see so much positive funding for the construction sector, we’re also aware of the impact of the increased tax burden on our customers. That’s why Molson offer affordable, flexible finance on all of our construction equipment for sale. We want to help our customers to get the machines they need to take advantage of the new government investment, without having to risk over-committing on their own investments.”
To find out how Molson can help you to make the most of the budget boost, with a comprehensive range of construction equipment for sale from some of the leading brands in the business, talk to us about your plans today. With exceptional value for money, flexible finance and unrivalled sales and service expertise, you can budget better with Molson.
