Rachel Reeves made history last week, as the first female Chancellor of the Exchequer to deliver a Budget. There was a good deal of speculation on the build up to her maiden Budget and one particular pre-Budget announcement caught the eye, with a decision to raise the National Minimum Wage to £12.21 per hour.
The standout Budget announcement for most businesses was the decision to raise Employer National Insurance Contributions (NIC), to 15% and a lowering of the threshold from when payment of NIC is due, from £9,100 to £5,000. The Employment Allowance, which allows smaller companies to reduce their NIC liability, will increase from £5,000 to £10,000. Estimates suggest that this announcement could raise an additional £25billion a year for Treasury coffers but what about the impact on business?
We’ve already heard concerns from some of our members, who are facing up to the challenge of meeting significantly higher costs of running a business. Some businesses may have to look at cutting back on staff numbers or may choose to pass on the cost to customers. Other reaction suggests that businesses may choose to respond by pausing any plans to award pay rises to existing staff.
In our letter to Rachel Reeves, we asked for clarity on the future of the UK Shared Prosperity Fund (UKSPF). This was due to come to an end in March 2025, so we’re pleased to see an announcement that UKSPF will continue to underpin specific programmes of business support (albeit at a reduced level), until at least March 2026.
The pain of proposed tax rises will hopefully lead to gain in the form of sector-specific business rates relief and infrastructure spending for major capital programmes. The decision to see full expensing and the annual investment allowance made permanent, as well as R&D relief being retained, is positive news.
Our latest Quarterly Economic Survey (QES), will launch on Monday 11th November and over the following weeks, we hope you will take the time to complete a survey and share your levels of post Budget business confidence as we head towards the end of 2024. Watch out for updates as we launch on the 11th.
Make Work Pay (MWP)
Make Work Pay (MWP) plan is a government initiative that aims to improve working conditions, job security, and pay in the UK. The plan is intended to help grow the economy and raise living standards. Our British Chambers’ of Commerce (BCC) colleagues have met with government officials on a number of aspects of MWP, including trade union policy, zero-hours contracts, fire and rehire, unfair dismissal, supporting families, pay and wages, the right to switch off, and the economic impact of MWP. At a local level, we’re calling for businesses to share their views on MWP. We feel that any legislation needs to be both balanced and flexible, with minimal cost, risk and complexity for business. You can read more about MWP through the link:
If you have any thoughts, concerns or questions about Make Work Pay, please e-mail details to:
