Businesses might be breathing a sigh of relief at no further tax increases but still have to navigate choppy economic waters, the CEO of NWL Chamber said today following the Spring Statement.
Chancellor Rachel Reeves kept her promise of zero tax rises but with slower than expected growth predicted it will make it a difficult environment in which to grow, Babs Murphy warns.
She added: “Details regarding changes to benefits were widely circulated before the Statement, and we hope these revisions, alongside promised support for employment services and Jobcentres, will effectively assist more individuals with disabilities and long-term health conditions in finding and retaining meaningful work.
“A more inclusive workforce not only benefits businesses but also enhances individual mental wellbeing. However, the changes to benefits alone will not achieve this; the accompanying support measures, along with assistance for employers managing additional costs, are essential.”
Businesses have expressed worry about the planned increase in employers’ National Insurance, anticipating it would hinder recruitment, while many expect to raise prices to counteract increased labour costs. Additionally, firm anticipate reducing future wage settlements, and many expect to cut back on growth investments.
Businesses are also expressing unease about the changes to the National Minimum Wage, where they expect higher wage costs for employees at this level, whilst predicting increased costs for those earning above it.
Babs added: “These wage pressures are expected to result in reduced growth investments and restricted recruitment. Furthermore, businesses are also anticipating passing these higher costs onto customers through price hikes, with some unfortunately fearing they might need to make redundancies.
“As these changes take effect in April, we have yet to fully understand their impact.
Despite the discourse about growth, it is essential to remain realistic with feet firmly planted on the ground about the challenges businesses face, and we sincerely hope for tangible outcomes.
“The Chamber will continue to collaborate with businesses to help them navigate these challenges while seizing opportunities.”
