A new snap poll indicates that British businesses are preparing to put the brakes on hiring plans in the wake of Chancellor Rachel Reeves's Autumn Budget, which sets the nation on a path towards a record tax burden.
Poll Reveals Widespread Hiring Hesitation
The survey, conducted by WPI Strategy and Merlin Strategy immediately after Wednesday's Budget statement, gathered responses from 500 business leaders. It found that a significant 56% of firms are likely to hire fewer people than originally planned this year.
While the Budget avoided direct tax increases on businesses, unlike last year's hike to employer national insurance, a combination of measures is expected to indirectly squeeze company finances. These include the extension of the income tax threshold freeze for three more years and an increase to the national minimum wage from April.
Key Budget Measures Impacting Firms
Business leaders identified the extended freeze on income tax thresholds as the most damaging aspect of the Budget. The survey showed that 47% believe it will negatively impact their business and staff, reducing disposable income and consumer spending power.
Despite these concerns, 45% of leaders conceded the measure was a justified way to raise revenue. The policy, which maintains current thresholds until April 2031, is projected to raise £7.6 billion for the Treasury by 2030.
Furthermore, a new business rates 'surtax' will target larger properties valued over £500,000, including supermarkets. This is designed to fund a permanent discount for smaller retail, leisure, and hospitality firms.
Business Confidence and Future Fears
The poll revealed a climate of apprehension among enterprise leaders. Approximately two-thirds fear they will be targeted with further tax rises in the near future.
When asked about alternative fiscal approaches, 56% of respondents said it would have been preferable for the government to raise income tax directly while leaving all other taxes unchanged.
Martin Beck, chief economist at WPI Strategy, commented that the findings "reinforce the sense that the Budget has done little or nothing to jump-start growth." He added, "The Budget may not have significantly worsened the mood among firms, but it’s done nothing to lift corporate confidence, which is essential if firms are to feel able to invest, expand and hire."
