The Government must ensure that the rise in the National Minimum Wage, announced by Chancellor of the Exchequer John Healey in his Budget, does not make it harder for small building firms to recruit, train, and retain the people needed to deliver the homes and improvements the country needs, says the Federation of Master Builders (FMB).
Responding to the Chancellor’s Budget, the FMB said that fair pay must be matched by practical measures that help smaller employers absorb rising labour costs. The FMB also welcomed support for first-time buyers and the continuation of the fuel duty freeze, while warning that housing measures must work for SMEs as well as the largest developers.
Brian Berry, Chief Executive of the FMB, commented:
“It was a budget of many small measures, but it’s uncertain whether they will add up to drive a bigger change in the construction industry. Most small building companies do the best for their workforce but will be concerned about additional labour costs. For small building firms operating on tight margins, a further increase will be difficult to absorb. The Government needs to avoid a situation in which well-intentioned pay policy reduces the capacity of SMEs to grow. The ‘Your First Home’ scheme to help first time buyers could strengthen demand for new homes but has a minor impact on smaller house builders. If the Government wants more regional growth, it must ensure local SME house builders can share in the opportunities created by any increase in housing demand.”
Berry concluded:
“Extending the fuel duty freeze will offer some stability to builders, and the decision not to increase Capital Gains Tax avoids adding further uncertainty. However, this Budget appears to miss important opportunities to cut VAT on energy-efficiency improvements and give small builders the confidence to invest in green skills and apprenticeships. Many small building firms will continue to face difficult decisions about recruitment, training, and future growth, without significantly more government support.”
