Business reaction to Labour’s tax raising budget

Businesses in Dorset say they may be forced to raise their prices after Labour’s first budget in 14 years.

A hike in employers’ National Insurance contributions and increased national minimum wage leave businesses to foot the bill.

Chancellor Rachel Reeves delivered her budget on the 30 October, promising to bring stability to the economy.

Garry Millard is the manager of The Crown pub in Northbourne and said the pub would feel the impact of the budget through declining customer numbers.

He said: “People have stopped coming. The pub industry is in decline because the prices keep going up.”

The amount businesses pay on their employees’ National Insurance contributions will increase from 13.8% to 15% in April.

The threshold at which they are paid will also decrease to £5,000, and the Treasury says this will raise more than £25 billion a year.

Kate Wheller, the Labour councillor for Portland and Weymouth, was disappointed the south west did not get a specific mention in the budget but felt reassured by the Chancellor’s measures.

“The brunt of the cost will be on those larger businesses who can afford to pay what they’re due,” she said.

There were no specific measures for the self-employed in the budget. Hairdresser Nicola Taylor was hoping for a change to the taxation system.

“If I have a good year this year, I will have to pay the same amount of tax next year,” she said, “regardless of whether I have a good year or not.”

She says the cost-of-living crisis has had an impact on the number of clients she sees.

“People are going longer between appointments,” she said, “they will forsake having their hair done because they have to prioritise.”

But Sandra Ground, who runs Unwind With Us in West Moors, says the past few months have been busier than expected for their wool shop.

“We would expect the autumn months to be our busiest,” she said, “but customer numbers have been significantly higher than this time last year.”

She says people tend to keep hobbies, even when money is tight.

“It gives them something to keep distracted,” she said, “crochet and knitting are relatively inexpensive hobbies, so people will find the money.”