CPA Reacts to Autumn Budget

The Autumn Budget was presented on Wednesday 26th November 2025 by Chancellor of the Exchequer Rachel Reeves, announcing some of the year’s biggest changes to fiscal policy. Professor Noble Francis, CPA Economics Director, provides an initial response to the impact for the construction industry.

With speculation in advance of the Autumn Budget at an all-time high and for longer than usual, the Budget couldn’t come quickly enough, if only to get rid of the uncertainty that had negatively affected homebuyers, home movers, the supply chain, clients and investors. The majority of the Budget was unsurprisingly focused on where the tax rises would be and how financial markets would react, rather than on capital investment, which was the focus of the government’s Spending Review earlier in the year. The Budget tax rises were backend-loaded towards the end of the parliament and not matched by spending cuts, which may be of concern to financial markets. However, on the positive side, the government did not make the same mistake as last year, when the burden fell largely on businesses through increases in employers’ National Insurance Contributions and lowering the thresholds. However, it did announce an increase in the National Living Wage by 4.1% in April 2026, which means that it will have increased by 43% in the space of just five years.
 
In terms of key policies directly affecting construction and product manufacturing, the government published its response to the Landfill Tax, stating that it will not proceed with transitioning to a single rate of Landfill Tax by 2030, though the lower rate will essentially double to £8.65 per tonne in 2026/27. In addition, the government said that the Energy Company Obligation (ECO) will end in March 2026 to reduce household energy bills in the near term, while simultaneously announcing an additional £1.5 billion in capital investment for the Warm Homes Plan. However, it did not state what the £1.5 billion would be used for, except to note that further details would be available in the Warm Homes Plan.

CFA members can view the CPA’s Weekly Notes Special on the Budget n their Members’ Area. For more information, read the government’s policy paper on the Autumn 2025 Budget here.