New research indicates that British businesses are preparing to put the brakes on recruitment plans following the Chancellor's Autumn Budget, which is set to impose a record tax burden on the nation.
Poll Reveals Widespread Hiring Caution
A snap poll conducted by WPI Strategy and Merlin Strategy immediately after Wednesday's Budget statement found that 56% of business leaders are now likely to hire fewer people than originally intended. The survey, which gathered responses from 500 business leaders, was designed to measure corporate sentiment in the direct aftermath of the fiscal announcement.
Unlike the previous autumn Budget, which directly increased employer national insurance, businesses were largely shielded from targeted tax hikes this time. However, a combination of measures is expected to squeeze company finances indirectly.
Key Measures Impacting Business Growth
The extended freeze on income tax thresholds for another three years, until April 2031, is viewed as particularly damaging. The survey revealed that 47% of business leaders believe this measure will negatively impact both their operations and their staff. Despite this, 45% conceded it was a justified action to raise revenue, with the freeze projected to generate £7.6 billion for the Treasury by 2030.
Other significant measures include an increase to the national minimum wage from April and a new business rates 'surtax' for larger properties valued over £500,000, such as supermarkets. This surtax will fund a permanent discount for smaller retail, leisure, and hospitality firms.
Business Confidence and Future Concerns
Martin Beck, chief economist at WPI Strategy, stated that the findings "reinforce the sense that the Budget has done little or nothing to jump-start growth." He added that while the Budget may not have significantly worsened the mood among firms, it has failed to lift the corporate confidence essential for investment, expansion, and hiring.
The poll also highlighted that 56% of respondents believed it would have been preferable for the government to raise income tax while leaving all other taxes unchanged. Furthermore, about two-thirds of business leaders fear they will face additional tax rises in the near future, signalling ongoing uncertainty for the UK's commercial sector.
