Autumn Budget 2024: Industry responses
Key trade organizations issue reactions and responses to the Chancellor’s Autumn Budget
Mineral Products Association (MPA): The Autumn Budget 2024 has been met with a mixed response by the Mineral Products Association, with the Chancellor’s commitments to long-term capital investment diluted by near-term business and housing tax increases, alongside road project cancellations.
Whilst mineral products demand is expected to gradually rebound in 2025 from current lows, the MPA warns that aspects of the Budget are likely to drag on that recovery. It says the increased tax burden on businesses – particularly the national insurance contributions rate and threshold – threaten to undermine investment, wages and jobs throughout the construction supply chain.
Aurelie Delannoy, director of economic affairs at the 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 house-building 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, the MPA’s senior director of communications and public affairs, 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.’
The MPA also views capping corporation tax at 25%, the retention of the full expensing for plant and machinery, and the £1 million annual investment allowance as positive measures, along with the corporate tax roadmap ‘provided it delivers the stable and predictable business tax regime, as promised,’ Mr McIlveen added.
On energy and decarbonization, the MPA says the confirmed funding for carbon capture, usage, and storage (CCUS) Track-1 projects, and £134 million to support the delivery of port infrastructure to facilitate floating offshore wind, are good news for mineral products manufacturers. However, the Government’s plan for the UK CBAM to come into force in 2027, a year after its EU counterpart, has raised industry concerns about potential exposure to high-emission cement imports in the interim. The MPA has called for the UK CBAM to align with the EU timeline in 2026 to ensure fair competition.
The Aggregates Levy rate will also increase by 5p to £2.08 per tonne in April 2025, costing producers an extra £8.5 million in 2025/26, and bringing the total aggregates levy payment to £355 million for the year. Meanwhile, for companies importing ‘critical’ minerals such as lithium, graphite, and cobalt to Britain, the Chancellor announced new state-backed loans aimed at supporting manufacturers in Commonwealth countries. Recognizing the need for certain raw minerals to be imported, the MPA has urged the Government to also encourage and secure reliable supplies of domestically sourced minerals – both ‘critical’ and ‘essential’ – by stimulating new investment and overhauling mineral planning.
On planning, the Chancellor confirmed plans to hire ‘hundreds’ of new planning officers, in line with the Labour manifesto, though further details are awaited as to how this will support mineral planning in line with MPA expectations.
Construction Products Association (CPA): Commenting on yesterday’s Autumn Budget announcement, CPA economics director Prof. Noble Francis said: ‘The Chancellor announced a challenging Budget that we believe provides room for cautious optimism. Whilst prioritizing the stabilization 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 decarbonization and household energy efficiency through the Warm Homes Plan over the next three years; and 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, 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 the Government appreciates the importance of the UK construction sector as an enabler for growth, productivity, and so many of its policy ambitions.’
Asphalt Industry Alliance (AIA): David Giles, chair of the AIA, said: ‘It was encouraging to hear the Chancellor acknowledge that the condition of our local roads is a reminder of ‘our failure to invest as a nation’, however it’s disappointing that the opportunity to deliver a step change was missed.
‘While, the additional £500 million for highway maintenance next year is welcome, it falls short of the long-term funding horizon the sector has been calling for. And, with a one-time catch-up cost of £14.4 billion in England alone, this additional allocation is a fraction of what’s needed to prevent further decline.
‘Local roads, which underpin all other local services, help support growth and are a key issue for members of the public and we know from our ALARM survey that conditions are at an all-time low, and that this is the result of decades of underfunding. Our hope was that the Chancellor would have announced a multi-year ringfenced commitment allowing local authorities to plan and proactively carry out the effective maintenance needed to drive improvement in our local roads.’
Construction Equipment Association (CEA): Viki Bell, director of operations at the CEA, commented: ‘This budget brings some positive developments for the UK’s engineering and construction sectors, especially with the £6 billion allocated to R&D in engineering. This investment, alongside the £520 million for a life sciences manufacturing fund and £20 billion committed to R&D, has the potential to support new technology, improve equipment safety, and encourage more sustainable practices –essential elements to keep UK construction competitive on a global scale.
‘Such funding could open doors for both SMEs and OEMs as we work to meet the demands of modern infrastructure projects. The Government’s renewed commitment to rail, road, and infrastructure development is a promising step for the construction equipment sector.
‘The commitment to resume HS2 construction to London Euston, the pledge to invest and maintain hospitals, and the investment in 300 new planning graduates all signal a strong focus on essential infrastructure and housing reform. This investment in the planning workforce is encouraging, but projects of this scale will still require sustained funding, co-ordinated planning, and broader industry support to be delivered effectively and on time.
‘The investment in 11 green hydrogen projects is another positive step, supporting the transition to cleaner energy and encouraging sectors like ours to consider alternative fuels. Despite these positive moves, it’s disappointing to see limited direct financial relief for construction firms.
‘Doubling the employment allowance to £10,500 helps smaller construction equipment firms by reducing National Insurance liabilities, however the planned increase in employer National Insurance from 13.8% to 15% in April 2025, coupled with the reduced secondary threshold from £9,100 to £5,000, is a double blow for firms. These added costs are likely to strain budgets and limit opportunities for new hires or expansion, putting significant pressure on SMEs and OEMs at a time when stability and investment are critical. While we welcome the forward-looking approach, more targeted support is essential to help our sector fully contribute to these ambitious goals.’
