Economic groups point out that taxes will hurt business confidence

British businesses are facing a “pressure cooker of rising costs and taxes” and confidence is “sluggish”, one business group said.

The British Chambers of Commerce (BCC) said a survey of more than 4,800 companies suggested confidence had fallen to its lowest level in two years.

Nearly two-thirds told the BCC that they were worried about their taxes following the Budget, which announced an increase in National Insurance Contributions (NICs) paid by businesses from April, with more than half worried about their tax over the next three months. We expect a price increase.

A Treasury spokesperson said more than half of employers could see their NI charges reduced or remain unchanged.

The strength of the UK economy has come under the spotlight after disappointing growth figures were released just before Christmas.

The economy contracted in October after zero growth from July to September, according to the latest official data.

The numbers were seen as a blow to the government, as it had made boosting the economy its top priority.

Labor has pledged to deliver the highest sustained economic growth in the G7 group of the world’s richest countries.

Businesses are already warning that budgetary measures such as increasing employer NICs and increasing the National Living Wage could lead to job cuts and price increases.

Kevin McNamee is chief executive officer of Denroy Group, a plastic products manufacturer based near Belfast and employing 250 people.

He said the combined impact of minimum wage and national insurance changes would cost the company “hundreds of thousands of pounds, which is very significant”.

He said it was “probably inevitable” that prices for some products would have to rise to cover higher costs.

“The focus going forward will be on increasing productivity and reducing headcount as the business grows, or certainly increasing productivity without adding headcount.”

He added that businesses were “shocked” by the changes to National Insurance.

“It’s hard to see how this budget is encouraging businesses to invest in growth. We’ve been lined with pockets to some extent here.”

BCC collected data from more than 4,800 businesses across the UK between November 11th and December 9th. According to the report, 91% of the companies surveyed were classified as small and medium-sized enterprises (SMEs) with fewer than 250 employees.

It found that 63% of companies are concerned about taxes. This is the highest level since the group started recording data in 2017, and up from 48% the previous year.

BCC said 49% of businesses expect sales to increase next year, and confidence has declined. This is the lowest level since the aftermath of the mini-budget at the end of 2022, business groups said.

More than half (55%) of companies surveyed said they expected to raise prices within the next three months.

“The budget’s worrying fallout is clear from our survey data,” said BCC Executive Director Shebaun Haviland.

“Business confidence is depressed amid pressure from rising costs and taxes.

“Businesses of all shapes and sizes say that National Insurance price increases are particularly damaging. Businesses are already cutting investment and say they will have to raise prices in the coming months. ”

A Treasury spokesperson said: “We have delivered a one-time budget to Congress to clean up the slate and provide businesses with much-needed stability.

“We will ensure that more than half of employers have no reduction or change in national insurance contributions, we will cap corporation tax rates at the lowest level in the G7, we will create a huge pension fund and we will By establishing the Fund, we are restoring political and financial stability and creating conditions for economic growth through investment and reform.”

The spokesperson added that this is just the beginning of the government’s transformation plans that will “make every part of the country better.”