Britons might need to be poised for fewer jobs or higher prices once more next year, after a new survey of business owners suggested almost half of them (49 per cent) would be considering hiking them if employment costs are raised again in the Budget.
Most firms have been hit at least once this year and several of them from multiple angles, following changes to the minimum wage, National Insurance contributions, rules around packaging costs, the end of business rates relief for some industries and the prospect of lower overseas sales due to tariffs.
Those cost pressures, along with widespread uncertainty over what is coming in this month’s Budget, has left some firms holding off on hiring additional workers, even as interest rates have slowly lowered across the year.
Now research by Employment Hero and a survey of 1,000 business leaders by One Poll shows that pricing and employment plans are both in the firing line if Rachel Reeves delivers further disappointment.
Along with the 49 per cent considering raising, a third (33 per cent) also said they would delay further hiring if the cost of employing people rises again. Almost one in four (24 per cent) also said they would consider making redundancies from existing roles.
More than half (59 per cent) of business owners suggested they don’t feel Budget decisions consider the needs of small businesses, while a whopping 86 per cent said they were “concerned” over what the Budget would mean for the company over the longer term.
The British Chambers of Commerce (BCC) have repeatedly warned the government against any further raises of business taxes, saying firms couldn’t continue to shoulder more and more of the burden to fix the economy.
While Ms Reeves has cited the need for economic growth, experts have argued that her policies are taxes are stifling it.
Rising prices contributes to increased inflation, which has been a major issue in the UK over the past few years. While the rate was lower than expected at 3.8 per cent in September, it remains well above the 2 per cent target and an inflationary Budget could add to the damage.
While the numbers over potential price rises will be of concern, other data may point to a limiting effect in what actually transpires.
Business insurance provider Simply Business released a report on Monday showing fewer small firms who had planned to raise prices in spring actually did so – fewer than half, compared to 74 per cent who had planned to do so.
However, that in turns means that absorbing extra costs means profitability shrinks, placing further pressure on those who would normally provide jobs.
“The Chancellor has an opportunity to address these challenges by reducing the cost of doing business and providing a platform for growth. Small business owners are calling for the government to reduce Corporation Tax for small profits (15 per cent), reverse or reduce employer NI increases (14 per cent), and provide more support for energy bills (14 per cent),” said Julie Fisher, UK CEO of Simply Business.
Kevin Fitzgerald, UK managing director at Employment Hero, added: “When you tax small businesses, you tax everyone. It creates a domino effect – higher costs lead to higher prices, fewer jobs and less money in people’s pockets. Small businesses employ the majority of our workforce. Make life harder for them, and you make it harder for Britain to grow.
“The Autumn Budget is an opportunity to learn from past mistakes.”
