THE Federation of Master Builders (FMB) has urged the UK Government to ensure the rise in the National Minimum Wage does not make it harder for small building firms to recruit, train, and retain staff.
Chancellor John Healey confirmed a 3.9% rise to both the National Living Wage and National Minimum Wage in his first budget, with the increased rate set to take effect from April 2027. The FMB said fair pay must be matched by ‘practical measures’ that help smaller employers absorb rising labour costs.
In its response to the budget, the trade body welcomed support for first-time buyers and the continuation of the fuel duty freeze.
Brian Berry, chief executive of the FMB, said, “It was a budget of many small measures, but it’s uncertain whether they will add up to drive a bigger change in the construction industry. Most small building companies do the best for their workforce but will be concerned about additional labour costs.
“For small building firms operating on tight margins, a further increase will be difficult to absorb. The government needs to avoid a situation in which well-intentioned pay policy reduces the capacity of SMEs to grow.”
Berry added that extending the fuel duty freeze will offer ‘some stability’ to builders, while the decision not to increase Capital Gains Tax avoids adding further uncertainty.
“However, this budget appears to miss important opportunities to cut VAT on energy-efficiency improvements and give small builders the confidence to invest in green skills and apprenticeships,” he added. “Many small building firms will continue to face difficult decisions about recruitment, training, and future growth, without significantly more government support.”
