Manchester businesses brace for impact of Rachel Reeves’ new budget
- The Chancellor Rachel Reeves has introduced a new budget for businesses
- Businesses fear cuts may force them to tighten their belts
Image: House of Commons/UK Parliament/PA Wire
Business owners in Manchester are bracing themselves for new economic challenges as they await the rollout of Rachel Reeves’s ambitious budget.
As laid out in the Chancellor’s statement to the House of Commons, employers and businesses will, from April 2025, be expected to pay an increased national insurance tax.
The 1.2% increase is intended to fill a £21.9 billion black hole within the public finances, an issue the current government and Office for Budget Responsibility say was left by the previous Conservative government.
Public funding
The budget is set to increase public funding, renewable technologies and is predicted to show a 2% GDP growth by 2025, which could lead to more business investment. It has been criticised by shadow Chancellor Jeremy Hunt as “taking the easy route”.
He told Good Morning Britain: “The result of these rises in taxation will be lower growth, lower living standards, and it’s ordinary families that bear the brunt.”
Will, the owner of Gourmet Coffee Bar & Kitchen near Oxford Road station, said that “from a business point of view, the increase of the employer’s national insurance for a relatively small business with tight budgets, it’s going to be difficult.”
When asked how it’s going to affect the business’ budget, he responded: “It’s going to have an impact. I’m under a lot of pressure from my bosses to get the costs under control.”
Leo, founder of Monsieur French Tacos on Oxford Road, said: “I think these changes will not affect us right now – but probably in the long run. As of now, I think we’ll be fine.”
He added “It’s being introduced at a bad time in our economy. It’s in a state of recession.”