Family businesses and the construction sector How the “missing middle” can fuel economic growth
We have built a business with 6,223 employees and a £2.56 billion turnover. We proudly generate jobs, deliver major public sector projects, and contribute our full and fair share to HM Treasury. In 2025, we paid or collected on HM Treasury’s behalf more than £500 million. We believe it’s right to pay our taxes, but are not happy when taxation leaves us unfairly disadvantaged versus our competitors and hampers our efforts to generate growth – hurting us and UK economy. At a time when the UK needs scale, resilience and long-term investment in the whole construction supply chain, the changes to BPR disadvantage the very firms best placed to deliver it. Wates Group grew through decades of reinvestment, patience and stewardship. Restricting BPR undermines that model, forcing capital out of the business when it should be deployed for growth. The result will be fewer firms being able to make the leap from mid-sized to market-leading just when the economy can least afford it. The Government should reconsider its position on BPR to promote the shared national priority of growth and its related social and economic benefits.
delivery to see what really works and long‑term enough in outlook to invest in better trained people and stronger technical competence. With the right support, they can help embed modern methods, digital tools and disciplined assurance into everyday delivery. A potential big win for the economy. Alongside other tax headwinds, these mid-sized firms are being hurt by the Government’s drastic reduction of Business Property Relief (BPR). Without BPR, Inheritance Tax is payable on the entire value of a company. Indicatively, a company worth £30m will suffer an Inheritance Tax charge of £5m on the death of the owner. With much value tied up in non-liquid assets and operating capital, some businesses will struggle to pay substantial capital sums of this nature. Indeed, some will have to be sold or broken up to pay the Inheritance Tax. To make matters worse, the Inheritance Tax is paid after income or dividend tax, so it is effectively double taxation. This fundamentally skews the playing field – as listed, foreign-owned, or PE-backed firms are free from such taxation. By removing full BPR, the Government is undermining its own efforts to foster growth. Family businesses of all sizes must now divert funds away from investing in business growth and towards preparing for the possible (and unpredictable) death of a shareholder. I join Family Business UK in calling for a full independent review of the new policy to assess its impact on jobs and economic growth.
Tim Wates Chairman, Wates Group
Many of the Government’s key objectives – from building 1.5 million new homes to delivering essential infrastructure – require a strong construction sector. Indeed, the built environment is critical for broader economic growth, delivering nearly £3 in economic value for every £1 invested. With the vast majority of construction businesses being family owned, the link between supporting family businesses and economic growth is clear. It is important for the Government to recognise this connection. While attention often falls on large contractors like the Wates Group to deliver major housing and infrastructure projects, SMEs represent critical parts of the construction supply chain. So, I’m pleased to see FBUK’s Policy Agenda champion the “missing middle”.
The Wates Group is now in its fourth generation of family ownership.
In the construction sector, mid‑sized businesses are close enough to
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