Rachel Reeves dealt blow as expert warns tax will ‘decimate' sector key to Angela Rayner

Rachel Reeves' National Insurance tax hike will "decimate" a sector key to Angela Rayner's plans, an expert has warned. Steven Mulholland, Chief Executive of the Construction Plant-hire Association (CPA), said: “The National Insurance hike is a direct threat to the future of family-run construction businesses across the UK. It’s a tax on jobs that will drive up employment costs, making it harder to recruit and retain the workers we so urgently need – all while the industry is already battling a growing skills crisis.”

He then suggested the measure would be counter productive as Ms Rayner, Sir Keir Starmer's housing secretary, aims to build more than a million new homes before the end of this Parliament. Mr Mulholland added: “If Labour is serious about delivering growth, it must urgently reassess this tax on jobs. Family-owned construction companies and their supply chain are the backbone of our sector – undermining them now will only risk delaying critical infrastructure projects like the Heathrow third runway and dampen housebuilding, making it far harder for Labour to deliver its 1.5million new homes."

The policy will make some firm unsustainble, the construction boss then warned.

Mr Mulholland said: "This hike, combined with further tax burdens coming down the track from changes to Business Property Relief and Inheritance Tax, will push independent family-run businesses to the brink of extinction.”

On March 24, the planning reforms cleared their first Commons test, amid warnings that changes risk undermining efforts to accelerate the delivery of new homes.

MPs voted 330 to 74, majority 256, to approve the Planning and Infrastructure Bill at second reading on Monday evening.

Ms Rayner said the Bill would speed up the planning system, help achieve her build target, allow for an expansion of Britain’s energy network and give greater environmental protections.

She told the Commons: “Make no mistake, this Bill will transform the lives of working people and Britain’s prospects for years to come. It is hugely ambitious and rightly so, because everywhere I go I hear the same frustrations.

“We just can’t build anything any more. We desperately need more homes and more development. But for too long, the answer has always been no, and that is choking off growth, leaving working people worse off, and leaving Britain behind.”