Business leaders complain Spring Statement fails to ease burden for companies bracing for ‘awful April’
BUSINESS leaders have complained that yesterday’s Spring Statement failed to ease the burden for companies bracing for “awful April” and damage from Labour’s workers’ rights bill.
Small and big firms alike were snubbed by Chancellor Rachel Reeves after they had urged her to stagger a sharp rise in National Insurance contributions introduced as part of October’s £24billion tax raid.
With growth forecasts for this year halved to just 1 per cent, business leaders pointed to the warnings from the Budget watchdog that the NICs changes will also lead to higher unemployment and higher prices.
Companies are braced for higher business rates and NICs as well as the minimum wage increase starting on Tuesday.
Rain Newton-Smith, chief exec of Britain’s biggest business lobby group, the CBI, said: “Weaker growth this year is a serious setback but not a surprise given the burden businesses are shouldering after the Budget.
“Firms are already braced for a difficult few months with NICs and National Living Wage increases next week.”
The CBI yesterday expressed gratitude that the Chancellor had at least kept her promise of no further tax hikes.
In November its chairman Sir Rupert Soames had argued forcefully that business was “not a cash cow to be milked”.
Shevaun Haviland, director general of the British Chambers of Commerce, said its research showed 82 per cent of firms would be impacted by the NICs hike.
She said they will be forced to raise prices, delay investment and cut back on hiring.
And she added: “The financial impact of the Employment Rights Bill has yet to be assessed by the OBR, but they expect it to be negative.
“The threat of US tariffs also looms large.”
Andy Higginson, chairman of the British Retail Consortium, told The Sun that the Government should focus on tackling rogue employers rather than introducing further red tape “that shackles economic growth”.
He said: “It will become a burden for everyone and introduce significant inflexibility for the workforce.”
Andreas Adamides, head of Helm, the UK’s biggest network for high-growth founders, said: “With tax burdens reaching a 70-year peak and National Insurance set to squeeze even tighter, we’re watching innovation being slowly strangled by bureaucratic penny-pinching.”
NIMISHA RAJA: Nim’s Fruit Crisps
“THERE was absolutely nothing for small businesses and certainly no ‘olive branch’.
“I’ve worked since I was 13 but with the current conditions I’ve never felt more financially worse off.”
JAMES WORTHINGTON: MyWorkwear
“IT definitely feels like our part of the economy is being forgotten and any sign of business rates relief, new incentives to invest or updates on NICs or minimum wage were missing.”
BEN GATENBY: 1st Defence Locksmiths
“THE upcoming tax increases eat into already tight margins.
“It’s harder to reinvest in better tools, training and advertising. To offset the costs, I may need to adjust pricing.”
NICK STOWE: Monsoon Accessorize
“THE Government don’t seem to understand how businesses work, don’t seem to recognise mistakes they’ve made, and don’t seem willing to change course. It’s really frustrating.”
KATY O’KEEFFE: Europlaz
“GROWTH isn’t purely going to come from houses being built.
“The focus must be on firms like ours, which create jobs via innovation and bringing medical tech to market.”
FAST START KIT
ENTREPRENEUR Helen Hardy, who founded online women’s football kit seller Foudys, is one of the 9,737 start-ups backed by NatWest’s accelerator scheme since its launch a decade ago.
The bank says it has helped create 12,000 jobs and raise £684million investment.
It is now launching a £1million competition for small businesses to win a £100,000 share of that funding.
Within a year of Helen securing her first round of investment from NatWest she had a contract with Nike and now has her sights on the Women’s Euros this summer.
BUILDERS VISTRY TO END WFH
TROUBLED housebuilder Vistry has called its staff back to the office full time as it scrambles to turn around after a major accounting bungle.
Last year it admitted it had significantly underestimated building costs, which led to a savage profit downgrade.
At the time Vistry had allowed hybrid working but yesterday said it had mandated five days in the office or on site for all of its employees.
Chairman Greg Fitzgerald said the move would enhance controls and ensure all divisions were at “best practice”.
He added that there were benefits of working in the office five days a week “including collaboration, sharing ideas and opening up communication”.
Mr Fitzgerald said the earlier problems had been a “good kick up the a**”. Vistry yesterday suspended its dividend while adjusted profits slid by a third to £263million.
NAPSTER BOUGHT
NAPSTER, the original music streaming site that enjoyed its peak at the turn of the millennium, has been sold in a surprising £160million deal.
It has been a small player in music streaming since being given a second life in 2016 following multiple copyright legal battles.
Its sale yesterday to a 3D technology company, Infinite Reality, means it will now focus on hosting virtual concerts and selling merch.