Andy Burnham's housebuilding plans are impossible without bringing down energy prices

With UK electricity prices around 45 per cent above the G7 average, bringing those costs down should be one of the government’s earliest priorities. If ministers are serious about delivering 1.5 million new homes and major infrastructure, they cannot ignore the mounting pressure energy costs are placing on the businesses expected to build them.

Labour’s ambition to deliver 1.5 million homes and major infrastructure is one our industry fully supports. Construction has a critical role to play in driving growth, delivering clean energy and building the infrastructure Britain needs. But none of that happens without the machinery on site. Put simply, if businesses cannot afford to invest in the plant and equipment needed to build Britain, Britain’s infrastructure ambitions will remain just that: ambitions.

That is particularly true in construction plant-hire. The Construction Plant-hire Association represents more than 2,000 businesses supplying the cranes, excavators, generators and specialist machinery that keep Britain’s construction sites moving. Worth £14 billion to the UK economy and supporting more than 191,500 jobs, ours is one of the UK’s most capital-intensive sectors, with around 26 pence of every pound reinvested into new plant and equipment. Almost all of that equipment relies on diesel or grid electricity, making energy one of our biggest operating costs.

That pressure is already being felt. Our latest member survey found that 66 per cent of firms identify energy costs as one of the biggest challenges facing their business. Since then, the continuing instability in the Middle East has added further volatility to global energy markets, driving up gas prices and creating even greater uncertainty for energy-intensive industries.

For a sector with little ability to switch away from fuel or electricity, there is simply nowhere to hide. Rising costs do not disappear; they delay investment. You cannot accelerate construction if the businesses supplying the kit are being forced to put the brakes on investment.

This is not about stepping back from the government’s growth or net-zero ambitions. Quite the opposite. If ministers want industry to deliver those ambitions, industry needs the confidence to invest.

That means recognising that exceptional global circumstances sometimes require targeted support. During periods of extreme energy price volatility, government should consider measures such as temporary VAT relief on fuel used by construction plant, alongside other practical interventions such as opening up North Sea drilling, that help energy-intensive sectors manage costs driven by events far beyond their control.

Our sector wants Labour’s growth agenda to succeed. We have the capacity, the expertise and the determination to deliver the homes, infrastructure and clean energy projects Britain needs. Work with us to ease the pressure on energy costs, give businesses the confidence to invest, and we’ll do what we’ve always done: get Britain building.

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Steven Mulholland is CEO of the Construction Plant-hire Association, representing 2,000 businesses supplying the vital kit and machinery needed to get Britain building.

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