World of Business on the Brink: Reactions to Reeves' Budget

The British business landscape is looking with concern at the latest budget by Chancellor of the Exchequer Rachel Reeves, which industry experts have described as "hard to digest." A significant increase in the minimum wage to £12.21 for adults, along with a £25 billion rise in employer contributions to National Insurance, has companies fearing potential job losses. In particular, the increase in employer contributions to National Insurance, which lowers the entry level for tax contributions, is seen as a challenge for labor-intensive sectors such as hospitality, retail, and leisure. Alex Baldock, CEO of electronics retailer Currys, emphasized that these measures could hinder investment in growth and jobs. The fundamental need to reduce the tax burden was also highlighted. Shevaun Haviland from the British Chambers of Commerce also expressed concerns, describing the budget as a tough blow for the economy. The recent wage increase and additional tax burdens could lead to a reduction in staffing levels, she warned. Simon Dodd, head of Young's, a British pub chain, warned that there is no miracle that can offset such cost increases in the hospitality sector. Kate Nicholls of the UKHospitality steering group sees the increased taxes and costs as a potential risk to the industry's growth. She predicted that the economic situation might stall due to the increased cost pressure. Verity Davidge from Make UK expressed a similar view, emphasizing that the increasing National Insurance contributions could lead to reluctance in new hiring. A proposed adjustment of fiscal rules by the government to increase borrowing could, according to Rain Newton-Smith of the CBI group, promote long-term investments. Nevertheless, many questions remain open about how the mentioned adjustment of the corporate tax rate, which was capped at 25 percent for the current parliamentary period, will affect economic stability. The withdrawal of relief on inheritance tax for businesses transferred within families caused additional uncertainty. Neil Davy from Family Business UK drew attention to the possible negative consequences for family businesses, which now face the challenge of maintaining or selling their operations.