Rachel Reeves’ policies risk derailing Angela Rayner’s flagship pledge of building 1.5million new homes, an expert has said. Steven Mulholland, CEO of the Construction Plant-hire Association, said more taxes on firms would pile on further costs, and “choke demand and put delivery at risk”. Mr Mulholland highlighted the impact of new environmental rules, the Chancellor’s national insurance hike, and the prospect of tweaks to inheritance tax, which Ms Reeves is believed to be considering. He said: “Cutting red tape in the planning system is welcome, but it will not on its own deliver the homes Britain needs.
“Construction firms are already grappling with a perfect storm of rising employment costs from National Insurance, higher build costs driven by new environmental regulations such as the Future Homes Standard, and soaring energy prices that make everything from producing bricks to running machinery more expensive.”
The cost of materials for new housing has risen by 37% since the pandemic, Mr Mulholland added, which is “piling yet more pressure onto already stretched firms”.
The specialist also warned looming inheritance tax changes threaten family-run SMEs, which make up the backbone of the sector.
He said: “We are already seeing the impact these cost pressures are having, with the latest S&P data showing construction activity falling at the steepest rate since Covid, while insolvency figures reveal that more than 16% of all insolvencies last quarter were in our sector.
“If Labour is serious about meeting its 1.5million homes target, it must start by backing the businesses that build them – through fair tax treatment for family-run firms, full expensing of leased plant and machinery, and a stable policy framework for investment in skills and apprenticeships.
“Without that, piling on further costs will only choke demand and put delivery at risk.”
Among the inheritance tax measures reportedly under consideration is a potential cap on lifetime gifts, part of a broader review into how assets can be transferred before death to minimise inheritance tax liabilities.
Under current UK rules, gifts made more than seven years before a person’s death are exempt from inheritance tax.
Gifts made between three and seven years prior are taxed on a sliding scale, depending on their value and the total estate.
This comes after independent analysis by CBI Economics, commissioned by Family Business UK (FBUK), projected that reforms to inheritance tax policies, specifically focusing on Business Property Relief (BPR) and Agricultural Property Relief (APR), which have been confirmed to take effect in April 2026, could lead to over 125,000 job losses and a £9.4billion reduction in economic activity between 2026 and 2029.
Ms Reeves said in July that she cares “more about getting a young family on the housing ladder” she does “about protecting some snails” as she defended the Government’s planning bill.
Earlier this month, the Government claimed nearly 100,000 homes have been sped up by an initiative to cut red tape.
Angela Rayner said the New Homes Accelerator was “breaking down the barriers” stopping new homes from being built, and would “turn the tide on the housing crisis”.
