The British Chamber of Commerce (BCC) has reported that confidence in UK businesses has decreased to its lowest level in two years due to concerns surrounding the increase in taxes and costs they must now pay. A survey conducted by the BCC of more than 4,800 businesses found that almost two-thirds of them were worried about taxes. This was especially true for firms following the announcement in the latest Budget regarding national insurance contributions which will be paid by firms, which led to companies feeling like they were having their “pockets picked to an extent here.”
Following the release of disappointing data concerning economic growth figures just prior to Christmas, the strength of the UK’s economy has been called into question. Latest information shows that between July and September, there was zero growth while the data showed contraction in October. This was seen as a very negative sign for the government, who had made the boosting of the economy top priority. Additionally, with the rise in national insurance contributions and minimum living wage, businesses are warning that price rises and job cuts could be inevitable.
Kevin McNamee, CEO of Denroy Group, which is a manufacturer of plastic goods located near Belfast, expressed his concern that the minimum wage and changes to national insurance contributions would cost the company “hundreds of thousands of pounds.” He added this would have a definite impact on the cost of several of their goods and felt that the cost saving focus would be on driving productivity instead of increasing headcount. Furthermore, he noted that other businesses had also been “shocked” by the changes to national insurance.
Shevaun Haviland, the BCC’s director general, announced after collecting data from the survey that “business confidence has slumped in a pressure cooker of rising costs and taxes, firms of all shapes and sizes are telling us the national insurance hike is particularly damaging.” Haviland added that businesses have already begun cutting back on investment and would be forced to raise prices in the coming months. A Treasury spokesperson, though, defended the government’s Budget, highlighting that over half of employers would see their NI contribution cut or remain at the same rate, and that their plan for change would benefit the entire country
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