Analysis of the detail behind the Chancellor’s Autumn Budget has revealed some concerning omissions in relation to growth according to the Mineral Products Association (MPA).
Despite welcoming the Government’s decision to bury proposed Landfill Tax reforms and increase local road spending, the MPA has serious concerns about the lack of policies designed to promote growth.
In its pre-Budget submission to the Chancellor, MPA put forward ideas to spark economic growth, including a super-deduction and serious pressure on regulators to encourage growth, as well as a list of key tax and policy changes to support the industry, covering infrastructure, highways, procurement and energy costs, and more detailed changes to taxes and policies.
The Budget delivered higher taxes for business and households, more complicated business rates for industrial sites, and few tangible steps designed to revitalise the economy, leaving little room for business confidence or investment. The announcement on the exclusion of indirect emissions from the Carbon Border Adjustment Mechanism is also a concern for MPA cement. Overall, the Budget gave no grounds to expect the markets to recover from their current low ebb, or to see critical sectors like housing or infrastructure pick up.
In 2024/25 the mineral products industry – a barometer for new economic activity in housebuilding, infrastructure and manufacturing – experienced the lowest sales of ready-mixed concrete for six decades, and the lowest levels of domestic cement production the 1950s.
Aurelie Delannoy, Director of Economic Affairs, said:
“This was a Budget focused on tax and welfare, not growth. Rising business taxes will continue to add to already significant cost pressures, while business rates have been made even more complex, and the rising tax burden on households will weigh on demand in the years ahead. In our Budget submission we called for measures to spark growth, which were notable by their absence.”
Chris Leese, Executive Chair at MPA said:
“Our members were hoping for something to kick start an economy that has seen the market for ready mixed concrete fall to its lowest level since the early 1960s. But the Budget gave the mineral products sector nothing to improve prospects for housing or infrastructure or to instil confidence, making it very hard to invest and grow. Right now our members are cutting jobs and closing operational sites, reducing the productive capacity that will be needed to deliver growth.”
Landfill Tax reforms buried
MPA, which represents 90% of GB aggregates production, made strong representations against the proposal to remove the Quarry Exemption in the proposed Landfill Tax reforms. If the Chancellor had gone ahead, this would have had a severe impact on sites that plan to rely on it for restoration after economic use – potentially mothballing up to 60 quarries, leaving them unable to be restored, leading to a loss of jobs and loading additional costs onto housing and infrastructure delivery.
But in the Budget documents, the Chancellor recognised the need to retain the quarry exemption to “ensure that housebuilders and the construction sector continue to have access to a low-cost alternative to landfill.”
Further, in the response to the consultation published alongside the Budget, the Government acknowledged that “the exemption currently provides a key route for the disposal of construction and demolition material, including from housebuilding and major infrastructure projects.”
Welcome investment in roads maintenance
The Chancellor also announced an increase in local roads maintenance up to £2 billion per year by 2029/30. Set against the backlog identified by the Asphalt Industry Alliance’s ALARM (Annual Local Authority Road Maintenance) survey report of nearly £17 billion this is long overdue and a welcome increase.
The industry and the APPG (All Party Parliamentary Group) for Better Roads have long made the case for long-term funding for highways authorities, ring fenced from the other pressures on local government, and members of the Group say they look forward to seeing the detail of the plans.
ENDS.
Photo Credit: Uwe Deffner / Alamy
About the Mineral Products Association:
The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and industrial sand industries. MPA is the sectoral voice for mineral products, covering 100% of UK cement and lime production, 90% of GB aggregates production, 95% of asphalt and over 60% of ready-mixed concrete and precast concrete production. In 2023, the industry supplied £18.4 billion worth of materials and services to the Economy, directly generating £6.7 billion in Gross Value Added (GVA). It is the largest supplier to the construction industry, which generated £141.5 billion in GVA in 2023.
www.mineralproducts.org
For media enquiries, contact Robert McIlveen at: Robert.McIlveen@mineralproducts.org