Leo Quinn, the boss with the biggest wage bill in construction, has given a cautious welcome to the Budget.
Chancellor Rachel Reeves yesterday (30 October) announced a 1.2 percentage point rise in employers’ national insurance (NI) contributions and lowered the threshold at which employers start paying them.
But Quinn, chief executive of Balfour Beatty, which paid staff £1.3bn in 2023, emphasised the rise in government spending enabled by the tax raid.
He said: “The government’s ongoing commitment to infrastructure investment is a welcome boost that will create a strong foundation for future economic growth.
“Budgets always entail difficult decisions and the increase in employer national insurance contributions will of course create challenges for all business sectors, our own included.
“It is therefore vital that the government balances these increases with the certainty that our industry needs in the form of the fundamental planning reforms that are required to enable businesses such as Balfour Beatty to deliver the infrastructure that is so vital to our country’s economic success.”
In the firm’s last set of accounts, the company said: “Balfour Beatty recognises that paying taxes arising from its activities is an important part of how it supports the communities in which it operates.”
Others in the sector were less optimistic about the impact of the NI increases.
Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “The government’s target to deliver 1.5 million homes is now at a considerable risk due to the increase in employer NI contributions.
“This announcement will hinder the industry’s ability to take on and train new staff and support the next generation of skilled workers.
“While some may point to planning reforms as the solution, those reforms have not yet been implemented, and it will take years before new projects avail of them.”
John Newcomb, chief executive of the Builders Merchants Federation, said: “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.”
Meanwhile, Richard Steer, chairman of Gleeds, said that the increase in NI would “dampen the appetite for recruitment in an industry that already needs to employ just under 251,500 workers by 2028 to just stand still”.
He added: “The Budget did little to persuade me that they treat our challenges on training, retention, planning reform and meeting net-zero targets with any more seriousness than the last government.”
