According to recent findings from the British Chambers of Commerce (BCC), more than 50% of private sector enterprises are contemplating price increases in anticipation of forthcoming tax hikes included in the Chancellor’s inaugural budget.
The BCC has highlighted that business confidence has dipped to its lowest point since the market turbulence that ensued following the Conservative government’s mini budget in the autumn of 2022. An extensive survey involving nearly 5,000 businesses revealed that concerns regarding taxation are at levels not witnessed since 2017. During their campaign, the Labour Party promoted a growth-oriented agenda, emphasizing a stronger partnership with the business community.
However, the announcement made in the budget on October 30 took many by surprise, as it proposed that businesses bear the brunt of £40 billion in tax increases. The current government contends that these tax hikes are essential to secure much-needed investments in public services, addressing what they refer to as a significant shortfall in the public finances, a situation they attribute to the previous Conservative administration.
Nevertheless, companies have expressed widespread concern that the increased expenses—stemming from elevated employer National Insurance contributions and rises in the National Living Wage effective April—will inevitably be transferred to consumers. Furthermore, these financial pressures are expected to adversely impact wage growth, employment levels, and overall investment in the business sector.
