Business confidence has dropped to covid-era lows after Rachel Reevesʼs surprise tax changes‚ hitting the lowest point since spring-2020. The Institute of Directors survey shows a dramatic fall to -65 in nov-2024 from -52 just a month earlier
Sir Keir Starmerʼs government faces growing push-back while dealing with internal issues (including his transport secretaryʼs exit) and spending lots of time on foreign visits to places like Azerbaijan and Brazil. The timing couldnt be worse as key policies face problems at home
The £25bn National Insurance rise is making business leaders re-think their plans; hereʼs what companies say they must do:
- Cut worker pay raises
- Reduce staff numbers
- Push up customer prices
- Lower investment plans
This Budget is utterly disastrous for any business employing lots of people
Andrew Griffith‚ the shadow business secretary points out: “a catastrophic loss of business confidence under this Government to an all-time low bar the pandemic.“ The London Chamber of Commerce data shows that one-in-five family-run companies might close instead of passing to next generations due to inheritance-tax changes
The tax increase moves employer NI from 13.8% to 15% with a lower starting point of £5‚000 yearly income – down from £9‚100. Stephen Burns from Hollywood Bowl notes: “The increase was un-expected since we were told NI wasnt going to be put up.“ Despite criticism Reeves argues her manifesto promise only covered workers NI not employers contributions