Business Confidence Plummeting1 Dec 2024 05:12
RACHEL REEVES’S tax raid has sent business confidence plunging to the lowest level since the first Covid lockdown, business leaders have said.
They say the Chancellor’s record tax rises are undermining economic growth and cutting off investment plans, with bosses forced to slash pay rises, sack staff and raise prices to cope with the £25 billion national insurance increase.
The findings published in a survey of the Institute of Directors will be a blow for Sir Keir Starmer’s embattled Government.
Andrew Griffith, the Conservatives’ shadow business secretary, said the survey “shows a catastrophic loss of business confidence under this government to an all-time low bar the Covid pandemic.”
Sir Tim Martin, the Wetherspoons boss, said: “All democratic governments need to manage the relationship between an economic horse and a public services’ cart – society needs both. This government has disincentivised and discouraged the horse, as the IOD survey shows.”
The IoD’s optimism tracker fell to minus 65 in November, sharply down from minus 52 in October and the lowest score since April 2020. Investment intentions and headcount expectations both dropped deeper into negative territory, which bodes ill for future economic growth and employment, while planned pay rises are also shrinking.
When asked about the impact of the NI increase, 50 per cent of bosses said they expect to give workers smaller pay rises as a result, while 44 per cent plan to increase prices charged to customers and 43 per cent anticipate cutting back the size of their workforce.
A separate survey by the London Chamber of Commerce and Innovation shows collapsing business confidence in the government’s economic programme. One in five family businesses surveyed said they would shut up shop rather than pass on their business to the next generation because of inheritance tax changes. Meanwhile, just one in four members of the body said they had confidence the government would deliver growth when surveyed this month.
Nice one Labour 🙄👍
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