The government’s recent Budget has been largely criticized by the Office for Budget Responsibility (OBR), which stated that no proposed measures would alter the growth forecast for the next five years. This raises questions about the effectiveness of the government’s efforts, especially since its focus has been on promoting economic growth. While the OBR upgraded its growth forecast for the current year, it subsequently downgraded forecasts for subsequent years through 2030.
Business leaders have expressed concerns regarding the lack of substantial pro-business measures, despite relief from previous burdens, such as a significant national insurance hike. Even sectors designated to receive support, including High Street retailers and hospitality, are facing increased operational costs due to rising business rates and labor costs. The government plans to calculate business rates for around 750,000 companies using a lower percentage of their premises’ rateable value. However, this adjustment has been met with skepticism, as many firms will still experience significant increases in their business rates bills.
An 8.5% pay rise for employees aged 18-20 could benefit young workers but may discourage employers from hiring new staff, especially following a 16.3% increase for the same age group last year. Concerns about the cap on salary sacrifice arrangements have also been voiced, as this may affect companies’ future pension contributions and investments.
On a more positive note, the Budget includes measures to expand tax incentives for investors in young companies, potentially offering support to growing businesses. A Treasury spokesperson emphasized ongoing economic outperformance and capital spending aimed at fostering growth. However, critics note that the government’s capacity to drive substantial growth remains limited, highlighting stability as a crucial component for economic progress. As the landscape evolves, stakeholders await further developments that may influence business conditions going forward.
Source: https://www.bbc.com/news/articles/cwyg3w9vexzo?at_medium=RSS&at_campaign=rss