A new report from the Mineral Products Association emphasises the tax burden on UK construction materials producers, arguing it damages confidence and investment
The overall tax burden on construction materials producers has grown by up to 29% in just four years. This is a direct result of policy changes, such as changes to National Insurance contributions and business rates.
Meanwhile, the same four years have seen a weakening market demand across the construction supply chain, with sales of aggregates, ready-mixed concrete, asphalt, and mortar hitting record lows.
Construction materials producers are the backbone of the industry
Government pledges, such as building 1.5 million new homes and delivering major transport and energy infrastructure, are reliant on producers of construction materials to supply the essential minerals needed for these projects.
Increasing tax burdens not only impact industry confidence and investment but also present a growing risk to the delivery of these pledges.
Aurelie Delannoy, director of economic affairs at MPA, said: “The tax burden on the mineral products industry has risen sharply since 2021-22, increasing business costs at a time when demand is already weak, and economic uncertainty remains high.
“This is putting investment under real pressure across an industry that is essential to delivering housing and infrastructure ambitions.”
More investment in construction materials is essential
Moving forward, construction materials producers have argued that investment is critical to ensure a steady and adequate supply of aggregates – from which hundreds of products are manufactured.
“MPA members employ around 89,000 working people producing materials which quite literally form the foundation of our country; concrete products, aggregates, asphalt, and cement, to name a few,” explained Chris Leese, executive chair at MPA.
“Our members are clear when they tell us that there has been a really noticeable increase in tax over recent years.
“In the current economic conditions, this is really holding the industry back. Our members want to grow and invest, but every additional tax rise in this list makes that harder to do.”
MPA’s suggestions for a stable construction supply chain
The MPA has previously called for government action to support construction materials producers and the wider industry.
Specific suggestions include:
- Rapid public support for infrastructure: Any projects in the infrastructure pipeline should be accelerated and budgets should be protected.
- Incentivise private construction spending: A super-deduction will bring forward investment and help kickstart growth.
- Targeted support to help reduce costs for the construction sector: Incentives such as super-deduction, a reduction in employer NICS, or extending VAT exemption more widely.
Delannoy concluded: “The UK Government must now focus on stability – no further increases in business taxation in the near term, protected infrastructure spending with a clear commitment to delivery, and support for housing demand.
“Without this, there is a risk to jobs, capacity and future investment across the construction supply chain.”
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