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Hunt’s Headlines – Industry Reacts
Jeremy Hunt’s autumn statement has been welcomed for cutting National Insurance and making tax easier for the self-employed. Being able to claim tax...
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Has The Pay Rise Snatcher Also Helped Construction?
Chancellor Rachel Reeves delivered a lose if you win, lose if you lose budget on 26 November for most hard workers – but there were some positives for construction supply and delivery…but you had to be paying attention. We report with comments from those that matter.
Thresholds are the amount of money you earn tax free. They are staying the same. So, if you are fortunate enough to get a pay rise in line with inflation or any kind of pay rise, you won’t find the threshold rising – all of your pay rise will be taxed at the basic or higher rate. If you are currently earning below the threshold (£12,571) and a pay rise takes you over that, you will start paying tax. That’s the lose if you win.
Lose if you lose – if you don’t get a pay rise, inflation is expected to continue at 3.5% a year according to the OBR (Office of Budget Responsibility). In real terms, it means your wages will buy you less and less – which has been the case ever since Covid.
Keeping the thresholds are expected to raise circa £8 billion alone without all the other tax measures Reeves announced which are being described as the biggest raid in a generation. These have been widely reported elsewhere.
However, it is worth noting that for employers there was a win and lose scenario. Minimum wages will rise again on 1 April 2026 but more apprentices can be employed without having to make a 5% contribution to their training.
The current rate for 21 and over will rise from £12.21 per hour to £12.71 per hour. 18 to 20 rises from £10ph to £10.85ph. Under 18 from £7.55ph to £8ph. Apprentices £7.55ph to £8ph. Apprentices who have completed one year and are over 21 will be entitled to £12.71 per hour.
The CBI commented: ‘These rises will concern many businesses already struggling with rising employment costs. With productivity growth still weak, firms will face difficult choices about how to absorb the increase. Young people are already among those most affected by a lack of vacancies, and such a large uplift in the NMW risks making it even harder for them to enter work’.
Free apprentices?
For the purposes of apprenticeships, SMEs are defined by whether they have a salary bill under £3 million a year (at £3m, firms have to pay the equivalent of 0.5% salary costs into the Apprenticeship Levy which then pays 95% of overall apprenticeship training costs). It has been widely mis-reported that SMEs pay the other 5%...that’s only for those over 21. Now SMEs will pay nothing for any apprentice no matter their age – but they will have to pay their wages at £12.71 per hour.
Reeves also announced £820 million in funding to get people, especially young people, into work. Employers should find a bigger pool of potential employees should employment confidence return – confidence has been at a low ebb since the last budget increased the cost of bringing people into work…and this budget has done little to change that outlook.
London first
Infrastructure plans announced in the budget see London coming out on top yet again. However, those in the window industry will be pleased to hear that three projects are expected to open up 60,000 home building opportunities. A Docklands Light Railway extension to Thamesmead (costing £1.7 billion) will connect land that can accommodate 25,000 new homes.
Meanwhile, a Bakerloo Line extension in the East End and the development of a West London Orbital London Overground connection would encourage a further 35,000 homes to be built.
Recently, Network Rail announced plans to build on unused railway land across the nation.
More from the CBI
The Confederation of British Industry asked the government to fast track infrastructure, maximise workforce potential, scale technology and boost competitiveness and overall was not disappointed. The Confederation even applauded the huge tax rises for providing the fiscal headroom that means Reeves should not come back for more tax hikes next year and for the commitment to getting more young people into work.
Speeding the planning system
350 additional planners were announced to deliver the necessary planning reforms ‘The CBI has welcomed the government's planning reforms through the National Planning Policy Framework and the Planning and Infrastructure Bill but skilled capacity at a local level is key to ensure projects are not stuck in long planning queues. An additional 350 planners are a good start and news of a Planning Careers Hub is welcome to retain and retrain more planners in the profession’.
Removing VAT charges on goods donated by businesses to people in need
For the window industry that regularly donates goods to good causes, the news that VAT charges will be completely removed by April 2026 is welcome. However, the CBI warned that each item must be valued at £100 or lower.
R&D tax credits
The government has stuck to its commitment not to change the scope of R&D allowances. The CBI says it would have been positive to see an extension to capital spending but given the fiscal position this is not surprising.
GGF & FENSA
Unlike many industry trade bodies who released Budget statements, neither of the big voices for the window and glazing sector had anything to say. The GGF Group appointed Tim Simmons as its new CEO just over a month ago after stalwart, John Agnew was forced to retire early so that the organisation could again find its teeth. On his appointment, Simmons said: “The construction and building products sectors are going through rapid change as industry adjusts to new regulation, environmental, operational and commercial change. The glass and glazing sectors are pivotal in supporting that journey. The GGF has an important part to play in shaping the future of the built environment.” Perhaps by the time of the Spring Statement, Simmons may have found his voice?
Institute of Directors
Anna Leach, the chief economist of the Institute of Directors, said: “Whilst this Budget further increases the tax burden on business, it is partially offset by some helpful measures. We welcome the funding for the Youth Guarantee and the full funding of SME apprenticeships for those eligible under 25, which will support young people in their careers.
“The decision not to converge the two rates of Landfill Tax will also be a relief to the construction sector.
Reconomy
David Gudgeon, the head of external affairs at Reconomy Connect, said: “It’s positive to see the government taking waste crime seriously and pushing for greater circularity but the move towards a single Landfill Tax rate by 2030 will come as a major blow to the housebuilding sector, which predominantly manages waste currently charged at the lower rate. These businesses are already grappling with significant cost pressures on both the demand and supply side and for many, the loss of the lower rate and the resulting rise in disposal costs, could be the straw that breaks the camel’s back. Ultimately, the most cost-effective way for businesses to minimise current and future waste-related taxes is to optimise resources, recirculate materials, reduce waste and divert it from landfill. The window industry has become a beacon of good practice in this area.”
Allan Wilen, the economics director at Glenigan
“We all knew the Chancellor needed to ensure the government’s finances appear on a firm footing and she made the most of the situation to do so. It is welcome that the Chancellor also reiterated the government’s commitment to £120 billion of capital investment previously set out in the Spending Review. But it’s vital the government rapidly delivers on these commitments and does not damage already fragile investor confidence, both for the UK construction sector’s survival and to ensure stronger UK productivity and economic growth.
“The new property tax on higher value homes, whilst targeting the top end of the property market, could have a disproportionately disruptive impact on the wider housing market. This could deter new house construction, especially in parts of the UK such as London, where property prices are highest. This will throw a spanner in the works regarding the government’s ambitious housing target, especially when there’s an increasing movement of people looking to live in the capital.
“Drawing on what I’ve heard from those at the frontline of UK construction and real estate, Stamp Duty has been repeatedly raised as a distinct blocker to shifting the current stagnation within the property market. For a government looking at all opportunities to balance the books yet deliver a fluid and prosperous residential market, it must be time to listen to the built environment sector and look at some of the current measures that are stifling buying and selling movement in the property market and, in turn, deterring related investment.”
Stuart Law, CEO of Assetz Capital
"The Budget documents reveal a striking imbalance. While the speech offered warm words about growth and delivery, the written detail confirms an overwhelming focus on large sites and large developers – despite the painfully slow build-out rates the sector is currently experiencing. Major developments are delivering roughly 0.4 homes per week per site, yet the government has doubled down on a strategy dominated by big, complex schemes with long lead times and huge infrastructure requirements.
"The MoD land release programme (which was not mentioned in the Chancellor's speech and appeared only in the supporting documents released afterwards), targeting up to 100,000 homes, will inevitably be delivered through master developers, large consortia or development corporations. Likewise, the £1.3 billion devolved National Housing Delivery Fund (also absent from the speech and revealed only in the written Budget papers) is designed for large urban regeneration projects and strategic infrastructure heavy sites. None of this creates land access for SME builders, none of it requires plot subdivision and none of it enables the smaller sites that SMEs specialise in bringing forward.
"This is a profound missed opportunity. SME house builders could deliver far more homes across thousands of small and mid-sized sites nationwide than a handful of giant developments ever will. Instead, the Budget offers nothing targeted at SMEs – no small site pipeline, no serviced plot requirements, no fast track planning routes for <30 unit schemes and no mechanisms to level the playing field.
"At a time when the country needs rapid, distributed housing delivery, it is deeply disappointing that the government has centred its entire strategy on big schemes with slow outputs and long gestation periods. The absence of meaningful SME support undermines the goal of accelerating housing supply and ignores the proven ability of smaller builders to deliver quickly, flexibly and at scale across the nation."
Robin Clevett, tradesperson and host at FIX Radio
“For builders, electricians and plumbers, this Budget will not be judged on how it plays in Westminster but on whether it lets them actually take on work, invest and hire apprentices. With National Insurance, wages and business costs all rising, many trades are feeling like they are being taxed simply for creating jobs.
“Within that, the government’s own housing and skills ambitions are now tightly bound to how viable life is for local trades. From council tax uncertainty affecting home improvement decisions, to tool theft and muddled VAT rules on green upgrades, policy choices are feeding directly into whether tradespeople can stay afloat, grow and support the skills revolution ministers talk about.
“Right now trades are being hit with a triple whammy of higher National Insurance, higher wages and rising business costs. It is, in effect, a tax on jobs. Every extra percentage point in NI is an apprentice not hired, a van not replaced or a pay rise delayed.
“Against that backdrop, it becomes much harder for the government to meet its own housing targets. It is difficult to promise hundreds of thousands of new homes a year while making it harder for the very people who build them to stay afloat, invest and grow.
“The uncertainty around proposed council tax changes is only adding to the pressure. When households are unsure what their bills will look like, the first things they delay are repairs and home improvements. For local trades, that drop in confidence risks becoming another strain at a time when margins are already tight.”
Tom Shorten, CEO HSS ProService Marketplace
“Construction and building services sit underneath almost every part of the economy, from housing and infrastructure to retrofit and day to day maintenance, so any squeeze on the cost of living or on business investment quickly finds its way onto sites and into supply chains. The Budget’s focus on stabilising the public finances and targeting support at people who are still struggling with bills is understandable, yet every frozen threshold and new levy risks taking spending power out of the system at the very moment we need demand and confidence to rise, not fall. The government talks a lot about the importance of homebuilding and infrastructure but we need to see promises become reality.”
Yselkla Farmer, CEO of BEAMA
"With much still to do to achieve Clean Power by 2030 and a need to accelerate progress towards the Net Zero 2050 requirement, now is not the time to introduce uncertainty. The scrapping of the Energy Company Obligation and other domestic electricity levies will deliver immediate savings to energy bills. However, without a clear policy on how this essential funding will be replaced within the twice-delayed Warm Homes Plan, the Budget has added further policy confusion.”
Picture: Chancellor Rachel Reeves delivered her Budget 2025 in the Houses of Parliament on 26 November.
Article written by Brian Shillibeer
27th November 2025