A Response to the Budget from the Heavy Plant Hire Industry

Chancellor Rachel Reeves gave her first Autumn Budget on the 30th October 2024, and it is set to have a significant impact on the heavy plant hire industry, construction, and other hire industries, amongst others. The cost rises will have an impact across the construction industry, affecting businesses big and small, as the government aims to fill a financial gap of around £22 billion. There have been several tax and wage increases announced in the budget that could impact the construction sector in its ability to grow and with plant hire also affected, this could mean a delay to housing and infrastructure projects.

Plant hire worries before the budget

Before the budget was announced there was a real worry from the plant hire sector, with a joint letter sent to the Chancellor from the Construction Equipment Hire Association (CEA), Construction Plant Hire Association (CPA), and Hire Association Europe (HAE). The letter set out that there would be a net benefit of £26 million if there was an increase in full expensing allowance to cover both operated and non-operated plant hire.

Impact of budget on plant hire

The heavy plant hire sector has been affected by the announcements in the budget. After calls from industry-leaders for the chancellor to extend full-expensing tax breaks for hired machinery, this was not implemented. This could become a significant issue in the future for companies that need to invest in plant and machinery for project requirements that constantly evolve and change shape. Where companies need to invest in essential upgrades to meet eco-friendly construction requirements, to boost safety, and to remain effective and productive, the costs may become prohibitive for some, which is a problem for the industry as a whole.

Response from the industry

The heavy plant hire, and construction industry have responded to the budget. Director of Operations at the Construction Equipment Association (CEA), Viki Bell, commented that the budget: “brings some positive developments for the UKs engineering and construction sectors, especially with the £6 billion allocated to R&D in engineering. This investment, alongside the £520 million for a life sciences manufacturing fund and £20 billion committed to R&D, has the potential to support new technology, improve equipment safety, and encourage more sustainable practices, essential elements to keep UK construction competitive on a global scale”.

Steve Mulholland, Chief Executive Officer of the Construction Plant Hire Association (CPA), said: “Today’s budget was an opportunity for the new government to show it is serious about providing the business community with stability and certainty. Despite not being part of the Industrial Strategy there appears to be an acknowledgment that infrastructure shall play its part in this new era of intended stability and growth with a commitment to spending on roads, rail, hospitals, schools, and homes.”

He did go on however to say: “We welcome the news that Fuel Duty remains frozen, however it is disappointing that employers will have to pay more in National Insurance, and that the plant-hire sector remains excluded from being able to take complete advantage of the Full Expensing Allowance in its current form”.

The Ardent view on the future of heavy plant hire

Innovation is everything in the plant hire industry. The impact of the first Labour budget for 14 years is yet to be fully seen, but what we do as a company will always reflect the desires of our customers, as we look to support construction and housing projects, engineering, large infrastructure, renewable energy projects, and many other industries with operated and non-operated plant hire. There will be challenges ahead but we wish to continue to evolve, to innovate, and to support the industries that we serve with the latest, most efficient, safe, and environmentally-friendly heavy plant hire that makes a difference and has a positive impact on the development of the country as a whole. Contact the Ardent team today to speak to us about your plant hire needs and we’ll be more than happy to assist you in planning ahead with the perfect plant hire provisions to suit your project, site, and budget.