Eight things Burnham could do to get Britain building

Most construction companies in the UK are small and medium-sized enterprises, or SMEs – 885,000 according to one recent count.

They do the lion’s share of hiring, training and physical construction work.

If Andy Burnham or whoever becomes the next prime minister is serious about building homes and infrastructure, getting NEETs into work and growing the economy, they should see these companies as one of the top allies available among all sectors.

I’ve spent years sitting across the table from hundreds of them. I’ve seen what helps businesses grow and, more importantly, what slowly breaks them.

So, here are eight of the most urgent actions the next PM could take to unshackle this powerhouse.

Right now, SMEs pay 19% on profits up to £50,000, hit marginal relief, then it’s 25% above £250,000. So a business making £49,000 in profit pays 19%. Push it to £51,000 and you’re suddenly in the marginal relief band, which creates a disproportionate tax charge, punishing growth.

My fix would be a flat 15% rate for all construction SMEs with revenue under £10m. It would be one of the lowest in the EU and would attract investors who want to set up UK businesses. This way, a business would make profit, pay 15%, and be able to reinvest the rest into people, equipment and contracts.

The government collects low amounts of tax now because businesses are structuring themselves to avoid the 25% band. With this simple change, they’d grow instead of hedging.

Business Asset Disposal Relief (BADR) used to be called Entrepreneurs’ Relief and was designed to reward people who built businesses and exited cleanly with a 10% tax charge.

The government then changed this to BADR and rates rose from 10% to 14% in April 2025, then to 18% in April 2026.

So, a business owner selling their company for £1m now pays £180,000 in capital gains tax instead of £100,000. Above £1m, current rates are 24%.

This is effectively an 80% increase in tax on the same transaction, which punishes entrepreneurship instead of encouraging it.

My fix would be to restore the 10% rate for qualifying business sales and extend the lifetime limit from £1m to £5m. This would allow a construction business owner who’s spent 30 years building something valuable to exit with enough capital to retire properly, or to reinvest in the next generation of businesses.

Employee Ownership Trusts (EOTs) were one of the best succession tools available.

They allowed business owners to sell to their employees, distribute wealth across the team and exit with full capital gains tax relief: ie zero tax.

Then the government decided it was too expensive, so from November 2025, only 50% of the gain is now exempt.

My fix would be to restore the 100% capital gains exemption for EOT successions, but cap it at £3m per business owner.

This keeps the incentive strong for genuine succession planning whilst controlling the cost to the Treasury. Business owners get a clean exit, employees get ownership, and the business stays intact.

Capital goes where it’s treated well and right now, the UK is not competitive.

If an investor is deciding between, for example, the UK, Ireland or Singapore, they’re comparing corporation tax rates, capital gains treatment and regulatory burden. The UK loses on all three counts.

To attract capital for large-scale housing, infrastructure and energy projects, I’d offer a 10% corporation tax rate for companies investing more than £10m into UK construction projects.

And how about a five-year capital gains tax holiday for investors who fund residential developments that deliver more than 100 homes, plus accelerated depreciation on plant, machinery and equipment used in major infrastructure builds?

The UK needs tax incentives that make investors say, “I’d be stupid not to put my money there”.

Right now, they’re saying the opposite.

SME lending is broken. Construction SME lending itself fell 20% between 2016 and 2024. Development finance dropped 48%, removing nearly £5bn from the market. Loan rejection rates increased from 5-10% historically to 43% in 2022-23.

The UK’s loan guarantee scheme is three to four times smaller than comparable programmes in the US, France and Germany.

Current lending requirements in the UK generally demand personal guarantees that wipe out business owners if a contract goes wrong – and they take roughly six months to approve a loan that’s needed in six weeks. That’s even if they get approved at all.

I would fix this by basing lending decisions on contracted revenue and not historical profit. If a construction business has £2m in signed contracts, lend against that pipeline.

Remove personal guarantees for loans under £500,000 backed by government schemes and approve or reject applications within two weeks, not two quarters.

Finance should follow viable businesses and real contracts and the biggest problem now is that it follows bureaucracy.

Construction represents 16% of all UK SMEs, the largest sector ahead of professional services and wholesale. Yet young people think construction means hard hats and mud. They don’t see the technology, the earning potential or the career progression.

A national campaign should showcase construction business owners who’ve built wealth to help glamorise the sector. Feature 25-year-olds running site operations, managing teams and earning £60,000-plus. Highlight the tech innovations such as drones, BIM software, offsite manufacturing and robotics.

The government would fund the campaign, with the support of trade bodies and construction firms to provide the case studies and work placements. Recruitment is not a taxpayer responsibility in the long term, but helping to seed the pipeline of staff and careers is.

The government announced plans to train up to 120,000 new apprentices. This is the right direction and now they need to make those apprenticeships visible and aspirational.

The UK economy is now 81% service sector based. That’s fine for financial services but a disaster for construction, which depends on physical materials, components and equipment.

When companies can’t source steel, cladding or HVAC systems domestically, they’re exposed to supply chain shocks, currency fluctuations and the geopolitical risks that have us all rattled.

To support UK manufacturing, the government should introduce a 5% tariff on imported construction materials where a UK alternative exists.

Use this revenue to subsidise British manufacturers that invest in capacity expansion and require public sector construction projects to source at least 60% of materials domestically.

I’d also create tax credits for construction businesses that buy British-made products, making it financially rational to choose domestic suppliers over imports.

The Small Business Protections Bill unveiled in March sounds good in theory, but does it have teeth?

Late payments create unnecessary worry and hold businesses back from scaling up. Previous governments have failed to make the step-change needed, despite some improvements in performance.

Really, the Bill needs to do three things: 1) impose automatic penalties on late payers, not just allow subcontractors to claim interest; 2) make directors personally liable for persistent late payment practices; and 3) publish a register of companies with poor payment records so subcontractors can avoid them.

If the Bill does that, it’s genuine reform. If it’s just another consultation process with voluntary compliance, then it’s not going to change anything. Subcontractors complete the work so they should be paid on time.

The above aren’t radical ideas, they’re practical fixes based on what I’ve seen work and what I’ve seen fail over two decades in construction.

The government can either create an environment where construction businesses grow, invest and employ people, or it can keep taxing, regulating and bureaucratising them into stagnation.

Bradley Lay is a veteran construction CFO and founder of TrueNorth Capital Group.