UK rental industry responds to government spending review

The Parliamentary Estate. Photo: Adobe Stock

The UK’s Construction Plant-hire Association (CPA) has welcomed elements of the Spending Review made by Chancellor Rachel Reeves earlier this week, but said it “misses the mark” with regards to tax reversal.

Reeves announced yesterday that the government would spend over £110 billion on infrastructure projects.

That includes £39 billion on affordable new homes, as well as £15.6 billion on transport upgrades outside of London and £2.2 billion on Transport for London’s (TFL) capital renewals programme.

It was also announced that £30 billion, including £14.2 billion to build Sizewell C in Suffolk, will be spent on nuclear power.

However, there was no mention of a reversal of tax hikes, with Reeves refusing to rule out further increases in the next budget. 

Steve Mulholland, chief executive of the Construction Plant-hire Association (CPA), said, “While investment in major projects like East-West Rail and Sizewell C is welcome, the Spending Review misses the mark by failing to reverse the tax policies threatening the very firms needed to deliver them.

“National Insurance hikes have made it harder to hire and retain staff, while looming changes to Business Property Relief risk wiping out the SMEs that underpin the supply chain.

“Without clear assurances in the Spending Review ruling out future tax rises, business confidence will remain low - undermining both growth and delivery. Unless ministers reverse course, they risk hollowing out the sector and turning today’s promises into little more than a wish list.”

Viki Bell, CEO of the Construction Equipment Association (CEA), added that while it is “positive to see construction, housing, infrastructure and apprenticeships getting attention again,” it is “still not seeing it translate into real activity on the ground.”

She said, “We’re hearing the right words, but the sector urgently needs to see shovels in the ground and projects getting underway. Construction firms are still laying people off.

“For our equipment manufacturers and supply chain, clarity and pace are just as vital – orders, investment and planning decisions rely on delivery, not just policy. We now await the detail of the government’s promised industrial strategy – a long-term, funded and joined-up plan that backs skills, accelerates delivery, and gives the industry the confidence to invest and grow.”