A leading construction industry body has warned the prime minister that measures unveiled in the budget will “fatally undermine” family-run companies in the sector, adding to the business backlash facing the government since the end of October.
In a letter to Sir Keir Starmer seen by Sky News, Steve Mulholland, chief executive of the Construction Plant-hire Association (CPA) said reforms to Business Property Relief and Inheritance Tax unveiled by Rachel Reeves, the chancellor, had raised “very real concerns [among] family businesses”.
The BPR changes involve reforms, due to be implemented in 2026, that will cap BPR at £1m and introduce a 20% levy on inherited business assets.
“As an association, we have already had to deal with queries from concerned family businesses on what these changes mean, how can they continue to operate in line with these plans,” Mr Mulholland wrote.
“To be clear, these are well established, in some cases, large family run businesses with an exceptional reputation for delivery and customer service.
“In the words of one senior executive ‘I question what is the point of continuing’.
“These changes will result in companies deferring investment and hiring decisions, expansion plans will be called into question, with prolonged uncertainty and instability at a time when businesses can ill-afford it.”
The CPA has 1,900 members, with Mr Mulholland describing them as “the backbone of the construction industry, worth some £14bn to the economy, supporting over 190,000 jobs”.
“The vast majority of these companies are family-run businesses,” he told Sir Keir.
“Our members have a key role to play in building the 1.5m new homes, that is a priority for your government and a key pillar of your Plan for Change”.
His warning to the PM comes after weeks of complaints from private sector bosses about the impact of October’s budget, the first from a Labour government for nearly 15 years.
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