Rachel Reeves told ‘warning light flashing’ as 4k businesses go under | Politics | News
The Chancellor has been issued a warning after worrying new data was released (Image: Getty)
An expert has warned Rachel Reeves that her policies will push more firms under and mean Labour will struggle to meet a crucial target. Steven Mulholland, CEO of the Construction Plant-hire Association, highlighted that his sector accounts for more insolvencies than any other, and “this is not a blip – it is a warning light flashing red”.
Construction firms accounted for 16.4% of all insolvencies in England and Wales in 2025, representing a larger share than any other sector, according to new data from The Insolvency Service. A total of 3,931 became insolvent last year – a decrease of 2.7% on the total in 2024 and a rise of 22% compared with pre-pandemic 2019.
Behind this figure are thousands of businesses that once provided jobs, apprenticeships and opportunities in communities across the country – opportunities that have now been lost, Mr Mulholland said. He added: โThese failures reflect rising fixed costs, prolonged tax uncertainty, and declines in work streams: a year on year 20% decline in project starts, a 32% drop in main contract awards, and a 22% decrease in planning approvals.
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Construction expert Steve Mulholland slammed Ms Reeves (Image: Steve Mulholland)
โLabour cannot claim it wants to deliver 1.5million new homes against this decline while increasing employer national insurance and leaving family-run firms staring down the barrel of inheritance tax and Business Property Relief changes coming into force in April.”
A survey of his association’s members found that 80% of family-run firms believe these changes put succession and family transfer at risk.
โPiling further costs and uncertainty onto those businesses will not drive growth – it will make a bad situation worse, pushing more firms under and putting jobs, projects and housing targets in jeopardy,” Mr Mulholland said.
Ms Reeves said in December: “For too long our economy has been held back by a housing system that slows growth, frustrates business, and prices the next generation out of a secure home.
“These reforms back the builders not the blockers, unlock investment and make it easier to build the 1.5million new homes across every regionโ rebuilding the foundations of our economy and making affordable homes a reality for working people once again.”
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The Government unveiled a list of changes to aid building, including a default “yes” to “suitable homes being built around rail stations, alongside minimum housing density rules”, as well as to “new homes building upwards in towns and cities, fast-tracking development schemes that meet high standards for well-designed homes”.
Moreover, ministers say that they are making it easier for developers โ particularly SME builders โ to build higher density housing, such as modern apartments and flats, on smaller sites and under-used land where appropriate.
A new “medium site” category for sites between 10 to 49 homes will ensure SME builders face “proportionate rules and costs for their site size”, officials add, “including considering a possible exemption from the Building Safety Levy”.
