- 63% of businesses say tax, including national insurance, is now a concern, following the Chancellor’s Budget – the highest level since 2017
- Business confidence has slipped to its lowest level since the aftermath of the mini-Budget in Autumn 2022
- A majority of firms (55%) now expect prices to go up in the next three months, with labour costs the biggest driver
- Only 20% of businesses have increased investment in the past three months – 24% have decreased
- Business conditions are weak, with only 24% of firms reporting increased cashflow and 30% a decrease
In the largest poll of business sentiment since October’s Budget, the British Chambers of Commerce (BCC) Quarterly Economic Survey (QES), shows concern about tax, including national insurance, has spiked.
Following the Chancellor’s autumn statement, 63% of firms cited Tax as a concern (compared with 48% in Q3), the highest level on record. Concern about inflation and interest rates remains at similar levels to Q3.
Business confidence has declined significantly with 49% of responding companies expecting their turnover to increase over the next twelve months (compared with 56% in Q3). Confidence levels are lowest in the retail and hospitality sectors (39% and 42% respectively).
The survey was conducted after the Budget, with the fieldwork carried out between 11th November and 9th December. The data from over 4,800 businesses across the UK (91% of whom are SMEs – fewer than 250 employees) also shows that the majority of firms are expecting to raise prices.
Thames Valley Chamber of Commerce (TVCC) is one of the largest contributors to the national QES, with hundreds of surveys completed each quarter by members and the wider Thames Valley business community.
As the accredited BCC Chamber for the Thames Valley region, TVCC Chief Executive Paul Britton met with the Chancellor at a business roundtable event on December 11th, where the Chancellor outlined her long-term plans to boost economic growth and acknowledged that partnership with business is vital. The Chamber flagged the potential impact of the budget on SME business confidence to invest in their workforce, and the need for better incentives for businesses to support the Governments growth agenda.
The regional results for the Thames Valley will be published by TVCC on Tuesday 14th January and businesses are invited to review the results and submit their views to future surveys. The QES is open to every business across Berkshire, Buckinghamshire, Oxfordshire and Swindon and informs the Chambers work to represent the voice of local business. More details are available here.
Paul Britton, CEO, Thames Valley Chamber of Commerce said:
The response following the budget reflects that local businesses feel they are carrying the weight heavily of the Governments plans for renewal with Tax by far the top external concern. As the engine of growth, exporters were missing from the budget and as the majority will be medium-sized businesses, there was no protection, re-assurance or incentive for them.
“The latest national survey results reflect the concerns that were flagged directly with the Chancellor. We need policies which encourage investment, raise productivity and encourage SMEs to enter new overseas markets.
Shevaun Haviland, Director General of the British Chambers of Commerce said:
“The worrying reverberations of the Budget are clear to see in our survey data. Businesses confidence has slumped in a pressure cooker of rising costs and taxes.
“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging. Businesses are already cutting back on investment and say they will have to put up prices in the coming months.
“The Government is rightly coming up with long-term strategies on industry, infrastructure and trade. But those plans won’t help businesses struggling now.
“Business stands ready to work in partnership to make the proposed Employment Rights legislation work for all, but the current plans will add further costs on firms.
“To help business we need to see quick action in three specific areas. Firstly, ministers should accelerate business rate reform to create a system that incentives investment.
“We also need the Government to speed up infrastructure investment, to help SMEs in supply chains across the country. Finally, it’s crucial to support exports, prioritising a better trading deal with the European Union.
“Without urgent Government action to ease the pain on businesses, the challenging economic landscape will get worse before it gets better.”
