Your Weekly Key Messages: 13th January
Budget Tax Hike Bursts Business Confidence
On Monday we published our latest Quarterly Economic Survey – the largest poll of business sentiment since the Budget. We had nearly 1,500 media mentions over 48 hours for this headline making story. The key findings of the survey were:
63% of businesses say tax, including national insurance, is now a concern, following the Chancellor’s Budget – the highest level since 2017
Business confidence has slipped to its lowest level since the aftermath of the mini-Budget in Autumn 2022
A majority of firms (55%) now expect prices to go up in the next three months, with labour costs the biggest driver
Only 20% of businesses have increased investment in the past three months – 24% have decreased
Business conditions are weak, with only 24% of firms reporting increased cashflow and 30% a decrease
The survey was conducted after the Budget, with the fieldwork carried out between 11th November and 9th December. The data from over 4,800 businesses across the UK (91% of whom are SMEs – fewer than 250 employees) also shows that the majority of firms are expecting to raise prices.
Here’s some of what our Director General, Shevaun Haviland, told journalists:
“The worrying reverberations of the Budget are clear to see in our survey data. Businesses 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. Businesses are already cutting back on investment and say they will have to put up prices in the coming months.”
“The Government is rightly coming up with long-term strategies on industry, infrastructure and trade. But those plans won’t help businesses struggling now.”
“To help business we need to see quick action in three specific areas. Firstly, ministers should accelerate business rate reform to create a system that incentives investment.”
“We also need the Government to speed up infrastructure investment, to help SMEs in supply chains across the country. Finally, it’s crucial to support exports, prioritising a better trading deal with the European Union.”
“Without urgent Government action to ease the pain on businesses, the challenging economic landscape will get worse before it gets better.”
Click here to read the full press release.
Deregulations plans
After the Prime Minister contacted regulators asking them to consider how they can help drive economic growth, our Policy Manager Jonny Haseldine spoke to the i newspaper. Here’s what we told them for Tuesday’s paper:
“We welcome any efforts to remove barriers to growth, particularly in these challenging times for businesses across the UK. The Growth Duty already sets some requirements for regulators, and it is good to see the Government looking to build on this.”
“Businesses of all shapes and sizes will be pleased to see any unnecessary regulation removed and barriers to growth removed.”
“However, getting sustained economic growth needs more than that. Ministers need to tackle the rising cost of running a business – whether that’s cutting taxes, workforce costs or other expenses. The current Employment Rights legislation risks adding further cost burdens.”
Click here to read the full article